By PROVIDENCE OBUH
LAGOS — The Securities and Exchange Commission, SEC, apex capital market regulator, yesterday, said there were plans to reduce the number of stock broking firms from more than 250 to a manageable size.

Director-General of the Commission, Ms. Arunma Oteh, said there was need for the dealing member firms operating on the Nigeria Stock Exchange, NSE, to be merged

She disclosed this during interaction with Media Executives in Lagos, saying: “There are over 250 stock broking firms on the Exchange which is not found in other Exchange.”

Oteh cited Malaysia and South Africa, which, she said, had bigger capital markets but fewer stockbrokers of 35 and 60 respectively.

She said the SEC would adopt a number of ways to reduce the number, adding that it was considering the consolidation and risk-based approaches.”We will look to see if they have the capital and the capacity to take the risk that they are taking. We may also ask them to seek partnerships. Some may not be able to cope with the rules and those ones will not exist,” she said.

She disclosed that the stockbroking firms have been asked to make a proposal in respect to the consolidation being canvassed for, noting that sometime this year, SEC will make submission to its Board over the issue.

“We want to do it right. We want to encourage the stockbrokerage firms themselves to come with the initiative.’’
“To build a world class market, there is need to grow small and long term enterprise and investors confidence has to be engendered. Without market integrity, it will be difficult to restore investors confidence, without investors confidence, you will not have investors, without investors there will be no market” she noted.

She stressed that 2011 is a significant year for the SEC because it is a year where the Commission will consolidate 2010 success, “ we’ve just started the journey of 2011, the reason why I said this is because the potentials of the Nigerian capital market are yet to be seen, ears yet to hear”

According to her, market integrity is the bases for world class capital market, which has been our focus and starting points, we can not be in isolation if we must play in the global market.

Oteh said some of the achievement they’ve made so far is that SEC has taken its stands to be part of the International Financial Reporting Standard, noting that this are part of effort to be a global play in the world capital market.

Oteh further disclosed that the code of corporate governance which was approved at the last Board meeting will be effective from April, in the course of the year, adding that as the years goes by the code will evolve. She said there are plans to engage quoted companies to ensure compliance on the issue of good corporate governance nothing that the Commission can not permit anything that is improper as the apex regulator, because of its plan to be world class market

Meanwhile, Oteh has opined that in the course of the year, part of its focus is to deepen and broaden the capital market in order to enhance fixed income framework. She said deepening the market involves the volume and levels of activities. “ Indeed, it is about enhancing liquidity and the instruments in the market” he added