Compliance with New Minimum Capital Requirement at Securities & Exchange Commission
Learn about the capital verification exercise conducted by the Securities & Exchange Commission in 2015 to ensure compliance with new minimum capital requirements for various financial entities. Find out the level of compliance achieved and details of functions reclassifications.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
ISYAKU BALA TILDE Director, Monitoring Department Securities & Exchange Commission April 2016
COMPLIANCE WITH NEW MINIMUM CAPITAL REQUIREMENT COMPLIANCE WITH NEW MINIMUM CAPITAL REQUIREMENT Introduction Introduction As indicated at various fora prior to the deadline of recapitalization, the Commission conducted capital verification in November/December 2015. 2
COMPLIANCE WITH NEW MINIMUM CAPITAL REQUIREMENT COMPLIANCE WITH NEW MINIMUM CAPITAL REQUIREMENT Capital Verification Exercise Capital Verification Exercise The capital verification exercise was in the first instance conducted by Audit Firms that went to the field to confirm capital injections, the reports of which were later reviewed by a Committee that further reviewed the adequacy of the findings from on-site verifications. CMOs with issues from the Audit reports were contacted to give further clarifications. The responses from the CMOs were reviewed before the Commission came up with the final list of CMOs that complied with the new minimum capital requirement. 3
COMPLIANCE WITH NEW MINIMUM CAPITAL REQUIREMENT COMPLIANCE WITH NEW MINIMUM CAPITAL REQUIREMENT Level of Compliance Level of Compliance Following capital verification, the level of compliance with new minimum capital requirement stood at 70% as at 4th January, 2015. The breakdown by function is as given below; Function Function Registered Registered CMOs CMOs Complied Complied Yet to Yet to Comply Comply Level of Level of Compliance % Compliance % 224 25 5 69 21 15 147 506 506 148 22 3 38 18 11 110 353 353 76 3 2 31 3 4 37 153 153 Broker/Dealer/Sub-brokers Issuing Houses Rating Agencies Fund/Portfolio Managers Registrars Trustees CMOs with Multiple Functions 66% 66% 88% 88% 66% 66% 55% 55% 86% 86% 73% 73% 75% 75% Total Total 70% 70% 4
COMPLIANCE WITH NEW MINIMUM CAPITAL REQUIREMENT COMPLIANCE WITH NEW MINIMUM CAPITAL REQUIREMENT Cont d Cont d Level of Compliance Level of Compliance It should be noted that the overall level of compliance before the capital verification exercise was 72% (74% for Broker/Dealer). Following reclassification and reduction in function (s), the Commission approved changes in function as follows; Broker/Dealer to Broker -27 Broker/Dealer toDealer -1 Broker/Dealer to Sub-broker -8 Fund Manager to Sub-broker -1 The Commission also cleared six (6) other CMOs with claims of compliance between January to date. A few other claims are being reviewed. Up to 20 applications for reduction in function and reclassification are being processed. 5
COMPLIANCE WITH NEW MINIMUM CAPITAL REQUIREMENT COMPLIANCE WITH NEW MINIMUM CAPITAL REQUIREMENT Non Non- -Capitalized CMOs Capitalized CMOs The non-capitalized CMOs remained suspended from operating in the capital market. The Commission will commence the process of cancellation of registration after December 31, 2016. 6
