The Securities and Exchange Commission (SEC) has announced that it would not renege on its December deadline directive on the new minimum capital base for all operators.
Fielding questions from the media at the end of the Capital Market Committees (CMC) meeting Wednesday in Lagos, its Director General, Ms Arunma Oteh, who also dismissed fears of another bad debt era in the banking sector, said the Commission was satisfied with the plans of the operators to meet the requirements, adding that the failure to implement the 2007 review of the operators’ capital base made them soft target for the 2007/2008 financial crisis.
Going down memory lane, the SEC boss explained that the issue of recapitalization has been overflogged for too long.
Her words: “The issue has been ongoing for a number of years. In 2007, SEC announced minimum capital requirement but didn’t implement them as at that time. When I joined the SEC in 2010, I was brief thoroughly about the initiative. And at that time, my colleagues even felt that the reasons the 2007/2008 crisis was even more difficult for us was because what they wanted to do 2007 did not happen and advised that we should immediately review the minimum capital requirements for different categories of market operators.
Having spoken with a number of capital market operators on the heels of crisis that not only affected Nigeria but every other jurisdiction, they felt we could wait for some time to recover from the shock occasioned by the crisis. We then waited till February 2012. We set up an industry-wide committee to basically review the situation and they came up with recommendation.
The stock exchange was involved including trade groups. When the current SEC resumed in January, it was one of the issues they were concerned about. Work was done, the Board of SEC approved that work. The work was submitted to the Minister of Finance with the requirements of the Investment and Security Act and they were announced in December 2013.
