The Security and Exchange Commission has suspended the licenses of twenty-four stockbroking firms due to their inability to meet the new minimum capital requirement by it.
Although the names of the affected capital market operators were not released, National Daily gathered that at the end of the verification exercise, 24 stockbroking firms were dropped from the provisional list.
In a statement posted on the website of the commission, SEC said in all, 24 CMOs were disqualified for non-compliance and /or inability to substantiate claim of compliance based on queries raised by the audit firms.
The statement added that 16 new CMOs were added to the existing list of successful CMOs of which 10 were newly registered companies and six filed evidence of compliance after the release of provisional list were verified and accepted.
SEC had in 2013 announced a new minimum capital requirement for all categories of market operators in pursuant to Section 313(6) of the Investments and Securities Act (ISA) 2007. The compliance deadline expired September 30, 2015 while SEC released a provisional list showing that 437 operators met the capital requirement. The commission then engaged 16 accounting firms for capital verification exercise after the release.
In the new requirement, SEC increased the minimum capital base for broker/dealer by 329 per cent from existing N70m to N300m. a broking firm which operated with capital base of N40m, now has N200, representing an increase of 400 per cent.
While the minimum capital for dealer was raised by 233 per cent from N30m to N100m that of issuing houses was increased to N200m from N150m. The capital requirement for a company to underwrite issues was also raised from N100m to N200m, just as share registration companies now have to raise their capital base from N50m to N150m.
Similarly, the minimum capital for corporate investment advisers was however retained at N5m, unlike individual investment advisers who would now operate with a capital base of N2m from the previous N500, 000.