Ten stockbroking
firms out of the suspended 65 at the Nigerian Stock Exchange (NSE) have
met the N70 million minimum capital base requirements stipulated by the
Securities and Exchange Commission (SEC), the market regulator.
While 61 of the
suspended dealing member firms were suspended for inadequate
shareholders fund in their 2009 audited accounts, five others were
sanctioned for inadequate shareholders fund in their 2010 audited
accounts.
The NSE, in its
updated list of the affected companies, posted on its website on
Monday, two weeks after the sanction, noted that BGL Securities,
Intercontinental Securities, Cowry Asset Management, DBSL Securities,
and De-lords Securities have complied. The other five firms are
Peninsula Asset Management Investment Company, Valmon Securities,
First Inland Securities Asset Management, Independent Securities
and Vetiva Securities.
Wale Oluwo,
managing director of BGL Securities, one of the companies that just met
the requirement, said the suspension “almost had negative effective” on
the company while it hurriedly had to raise the new capital base.
Meanwhile, a
stockbroker whose company was not affected, David Adonri, chief
executive officer of Lambert Trust and Securities Company Limited, had
said that with the new capitalisation, “Nigerian stockbrokerages would
probably be the highest in the world.”
“In India, the
fourth largest economy, the maximum capital for stockbroking firm is
equivalent to N2 million. The initial N20 million required in Nigeria
is even over capitalisation,” Mr. Adonri said.
Meanwhile, the NSE had assured investors who are clients of the suspended stockbroking firms of the safety of their investments.
Emmanuel Ikazoboh,
the interim administrator of the Exchange, said, “A circular (was
issued) to remind all suspended dealing members firms of their duty to
instruct and appoint another stockbroker to carry out the mandate they
had gotten from their clients prior to their suspension.”
Mr. Ikazoboh said
the circular was in line with the Article 57 (d) of the ‘Rules and
Regulations Governing Dealing Members’ which provides that “the dealing
member shall be under a duty to instruct and appoint another dealing
member to carry out any instructions already received by it on behalf
of its clients prior to suspension and shall immediately notify the
Exchange in writing of such appointment.”
He, however, said most of the affected firms have complied with the directive.
Mr. Ikazoboh urged
the affected companies to “ensure that its innocent clients do not
suffer any loss or embarrassment as a result of the suspension.”
“The Exchange would not tolerate any complaint received against any
dealing member firm for failing to carry out instruction received by
the firm prior to the suspension,” he said.
