SEC insists on Dec 31 deadline for market operators to recapitalise

By PETER EGWUATU & NKIRUKA NNOROM

The Securities and Exchange Commission, SEC has said that the deadline for recapitalisation of capital market operators remains December 31, 2014, just as it vowed to maintain zero tolerance for market infractions.

The Commission also lamented the low level of literacy about capital market activities which has resulted to insignificant contribution of capital market to Gross Domestic Product, GDP.

While addressing financial reporters after the Capital Market Committee, CMC third quarter meeting in Lagos, Director-General of SEC, Ms. Arunma Oteh, said: “The Commission has not changed the rcapitalisation deadline given to respective capital market operators.

The December 31, 2014 deadline is still on course. But we are happy that many of the institutions are responding and taking various options available to recapitalise.

“These options may be in form of bringing new funds, merger etc. But from the briefings they have had with us, we hope they will be able to meet the deadline.

What I want you to know is that we have not changed our decision on recapitalisation. It is true that change is difficult to make, but it will be better if these firms recapitalise in line with global practice.”

While commenting on possible crisis in the banking sector, she stated that the Nigerian banking sector remains solid and there was no need for any panic. “Though, I have not read the report concerning possible banking crisis, but in my own opinion, the confidence in the banking sector is in order despite any report on banks’ exposure.

We had far reaching reforms in the banking sector starting in 2009 and the financial services regulators were very much committed and they ensured that banks met all the regulatory requirements, including minimum capital requirement and some that did not meet it either merged or were bridged by Nigeria Deposit Insurance Corporation, NDIC and this resulted in the establishment of the Asset Management Corporation of Nigeria, AMCON that took over all of the bad debts of some of these institutions and also provided recapitalisation to zero to some of those institutions.

“These far reaching reforms have been studied by some other jurisdictions and there is nothing in my mind that suggests we should be concerned in terms of the conditions of the banking sector,” Oteh said.

On facility given to the power sector, Oteh said, “I think this is a credit decisions, and one of the areas that the Central Bank of Nigeria, CBN has focused on is on enhancing the quality of credit decisions that are being made. I have no reason in my mind to doubt the credit decisions taken. Both the past governor of CBN and present governor are all committed to risk management. I think our banking sector is world class.”

- Culled from: http://www.vanguardngr.com