Capitalisation: SEC moves to sanction 94 operators

Following the deadline for new capital requirements for Capital Market Operators which expired on September 30, 2015, the Securities and Exchange Commission (SEC) at the weekend issued a pre-cancellation of certificate of registration to 94 market operators.

In a notice obtained from SEC’s website by Sunday Telegraph, the apex regulator said the 94 CMOs which were registered by the Commission for various functions in the Nigerian capital market have consistently failed to render their statutory returns to the Commission and may have been unable to comply with the new minimum capital requirements before the deadline stipulated by the Commission which expired on September 30, 2015.

In view of this, SEC directed the affected CMOs to make presentations to the commission, on or before December 4, 2015, and give reasons why their registration as CMOS should not be cancelled.

The listed operators include City Investment Management Limited, Consolidated Investment Limited, Consult & Capital Limited, Eazytrade Concept Limited, Elyon’s Asset Management Limited, Emi Capital Resource Limited, Enterprise Capital Management Limited and Eqinox Asset Management Limited, among others.

A total of 437 capital market operators have met the new minimum capital requirement as at September 30, 2015. A provisional list published on the SEC’s website following the expiration of the deadline showed that apart from the operators that met the new capital requirement, four merger applications were awaiting approvals/court sanctioning.

A note attached to the list read, “The above provisional list is based on the submissions by capital market operators, who are eligible to undertake capital market activities.

However, the commission would be engaging accounting firms to conduct capital verification, after which a final list would be made public.”

There had been speculation last week that the commission might extend the deadline after repeatedly saying it would not do so, but an industry-wide committee on the minimum capital requirement has released procedures that investors can follow to move their stock account from operators that fail to meet the requirement to those that did. SEC had on December 19, 2013 issued a new capital requirement for capital market operators with December 31, 2014 as deadline but the deadline was later extended to Sept. 30, 2015.