Securities and Exchange Commission
The Securities and Exchange Commission (SEC) has enlisted the services of over 15 accounting firms to verify the sources of funds by MARKET operators that complied with the new minimum capital requirement.
SEC had in 2013, announced new minimum capital requirements for all categories of market operators in pursuant to Section 313(6) of the Investments and Securities Act (ISA) 2007. The compliance deadline expired last Wednesday. The provisional list released by the commission showed that 437 operators met the new capital requirement, while four merger applications are pending before the commission.
However, THISDAY checks revealed that in line with its promise to verify the compliance status of the operators, SEC has engaged some accounting firms to carry out the verification exercise.
It was gathered that SEC and the accounting firms are in discussions on the modalities for the verification exercise.
“SEC had said early this year that it would carry out a verification exercise on capital market operators after the expiry date, which was September 30, 2015. After the expiry, the commission came out with a list of operators who have filed their compliance documents. That list is a provisional one. The final list will come out after the verification by the accounting firms,” a source in one of the accounting told THISDAY.
Another source explained that the focus of the verification exercise would be more on those operators who filed their compliance requirement at the late hour.
“SEC has emphasised the need for this verification especially given the fact that 20 to 30 per cent submitted their compliance few days to the deadline. SEC has to go in, verify and authenticate the source of funds. After the verification, SEC will not come out with the final list,” the source said.
The commission had advised investors to verify the compliance status of their various preferred market operators. According to the regulator, the investing public should verify the compliance status of their preferred operators by checking the list posted on the commission’s website.
SEC increased minimum capital base for broker/dealer by 329 per cent from the existing N70 million to N300 million. A broking firm which operated with capital base of N40 million, now has N200 million, representing an increase of 400 per cent.
While the minimum capital for dealer was raised by 233 per cent from N30 to N100 million, that of issuing houses (facilitators of new issues in the primary market) was increased to N200 million from N150 million. The capital requirement for a company to underwrite issues was also raised from N100 million to N200 million, just as share registration companies now have to raise their capital base from N50 to N150 million. The minimum capital for corporate investment advisers was however retained at N5 million, unlike individual investment advisers who would only operate with a 300 per cent hike in capital base from N500,000 to N2 million.