By PETER EGWUATU

The Securities and Exchange Commission, SEC, yesterday postponed the deadline for the recapitalisation of capital market operators from December 31, 2014 to September 30, 2015.

The commission in its website said that the Board of SEC at its meeting of December 22, 2014 reviewed the status report on the level of compliance by capital market operators, with the new minimum capital requirement which has a compliance deadline of December 31, 2014.

According to the commission “The Board expressed satisfaction with the efforts made by all operators, particularly those who have complied with the new requirements. The Board, however, took cognizance of the effect of the global economic situation and approved an extension of the deadline for compliance with the new minimum capital requirements by nine months, to September 30, 2015.”

It will be recalled that SEC recently announced the decision to raise the minimum capital requirements for capital market operators under a new minimum capital structure expected to come into effect by January 1, 2015. The capital market regulator had said that under the new arrangement, the minimum capital base for brokers/dealers had been increased by 329 per cent from the existing N70 million to N300 million.

When the policy takes off as planned, a stock broking firm currently operating with capital base of N40 million would be required to have N200 million, representing an increase of 400 per cent. The minimum capital base for dealers would increase by 233 per cent from N30 million to N100 million.

Also, issuing houses, which facilitate new issues in the primary market, would now be required to have a minimum capital base of N200 million, as against the current capital base of N150 million. The capital requirement for underwriters would also double from N100 million to N200 million, while registrars would now have a minimum capital base of N150 million, as against the current requirement of N50 million.

While the minimum capital base for corporate investment adviser remained unchanged at N5 million, individual investment advisers would have to raise their capital bases by 400 per cent, from N500,000 to N2 million. Also, dealing members of the exchange are contending with minimum operating standards recently introduced for all the three classes of dealing members, including brokers and dealers. The new standards address the five broad areas of manpower and equipment, organisational structure and governance, effective processes, global competitiveness; and technology.