SEC sets July deadline for market operators proposing reclassification

The Securities and Exchange Commission (SEC) has directed all Capital Market Operators (CMO) proposing reclassification to notify the commission not later than July 31, 2015.

These include brokers/dealers who want to become sub-brokers or seeking to reduce their registered functions in view of the new minimum capital requirement.

The SEC said in a recent circular titled “new minimum capital requirement – reclassification/reduction of registered functions, mergers and acquisitions” that the directive also applies to Capital Market Operators opting for Mergers, Acquisitions or any other form of business combination.

Recall that pursuant to Section 313(6) of the Investments and Securities Act (ISA) 2007, the board of the Securities and Exchange Commission (SEC) had approved the new minimum capital requirements for all categories of Capital Market Operators.

Among others, the capital requirement for Broker/Dealer has been increased from N70 million to N300million.

For broker only, the capital requirement has been increased from N40 million to N200 million; while for dealer, it has been increased from N30 million to N100 million.

The Securities and Exchange Commission had informed capital market operators that it will stick to the September 30, 2015 deadline, which it set for them to recapi- talise in line with the new capital requirements ap- proved by the commission in 2013.