Director–General of the Securities and Exchange Commission (SEC), Mounir Gwarzo said there is no going back on the three-month deadline given for the recapitalisation of stockbroking firms operating in the country.
All firms, he told executive members of the Association of Stockbroking Houses of Nigeria (ASHON) who paid a courtesy visit to his office on Monday that to recapitalize as part of their Minimum Operating Standard (MOS), to meet the minimum capital requirement.
Gwarzo, who spoke against the backdrop of the suspension of some of its members by the Commission and the Nigerian Stock Exchange (NSE) on account of deficiency in capital base.
He noted that stockbrokers carry equities in their balance sheet and prices of such have dropped, resulting in the need for owners of such stockbroking houses to inject fresh funds and remain in business by shoring up their capital.
The SEC boss restated the commission’s resolve to promote the development of Commodities and futures exchanges being midwived ASHON.
Gwarzo was reacting to an earlier appeal by the ASHON executive committee, led by its Chairman, Patrick Ezeagu that the commission should extend the grace period to six months to enable them meet the deadline to recapitalize or reclassify.
The group also noted with concern the proposed amendment of Rule 56(1) on “Function of Brokers(Harmonization of Registration requirement for incidental functions),” which would preclude brokers from providing investment advice to their clients/Public.
The ASHON representatives had sought to know the thinking behind the proposed amendment, soliciting for a reconsideration of the proposal, against the backdrop of the value addition offered by broker/dealers while providing investment advice to their clients. They argued that a lot of stock broking houses had well established research desks that not only help to broadcast market information on a continuous basis, but also carry out in-depth analysis and provide opinions to complex financial issues to such clients.
The Association also expressed dismay over the Federal Government’s sole reliance and emphasis on monetary policy for macroeconomic management at the detriment of the capital market.
The association accepted to look at the Investment and Securities Tribunal funding proposal being championed by SEC and NSE.