Nigerian Stockbrokers: SEC Must Stop Being Indecisive 


Nairametrics| It is stale news that the Securities and Exchange Commission (SEC) revoked the licenses of 21 stockbrokers. Out of these, 17 were for their inability to meet capital requirements, three for inactivity and one for fraud.

The Securities and Exchange Commission (SEC) needs to stop shifting goalposts and act decisively. It first announced the capital base increase in 2013 with a deadline of January 1, 2015. The capital base of the players in the stock market was reviewed as follows: broker/dealers – N70 million to N300 million; brokers – N40 million to N200 million; dealers – N30 million to N100 million; issuing houses – N150 million to N200 million.

The deadline for the increase was extended to September 2015. After much pressure from operators, it was extended to December 2016, but later extended, yet again, to March 31st, 2017. Firms were given the options of either reclassifying their operations or merging their businesses.

A broker is an individual/company that trades the stock market for itself; a dealer trades on behalf of customers; a broker/dealer trades for both itself and customers; issuing houses help companies to raise funds from the capital market; while underwriters guarantee a proportion of funds to be raised by companies.

Despite the fact that the regulator continues to extend the deadline, more firms continue to fail in meeting operational requirements, yet are still operating. The endless requests for an extension indicate that many companies are struggling to survive. SEC needs to be firm and decisive by announcing the final deadline and publishing a comprehensive list of capital market operators that meet the requirements. Doing so will significantly boost investor confidence in the stock market, which is quite low at the moment.

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