Capital Market Operators Seek 6-month Recapitalisation Deadline Extension

Operators in the nation’s Capital market have called on the Securities and Exchange Commission (SEC) to extend the deadline for the ongoing recapitalisation of regulated capital market entities from June 2027 to December 2027

The call was made at the Capital Market Academics of Nigeria (CMAN) first quarter, 2026 Roundtable themed, “Deconstructing the New Minimum Capital Requirements for Regulated Capital Market Entities in Nigeria.”

LEADERSHIP reports that under the revised requirements, the SEC raised the minimum capital requirements, with broker-dealers now required to have N2 billion, brokers N600 million, and dealers N1 billion.

Sub-brokers have also been affected, with digital sub-brokers required to maintain N100 million in capital and corporate sub-brokers N50 million, up from N10 million each previously.

However, speaking at the event, president of CMAN, Professor Uche Uwaleke, said while recapitalisation is necessary and deserves full support, the proposed timeline remains debatable.

He noted that 2027 is an election year, typically characterised by uncertainty and defensive investor behaviour, which could make capital mobilisation difficult.

Uwaleke urged the SEC to consider extending the deadline to December 2027, effectively shifting the implementation period from 18 months to 24 months, saying that “There is no doubt that recapitalisation is necessary, but extending the deadline would better align with market realities.”

Supporting this position, past president of the Independent Capital Market Registrars (ICMR) and the Chartered Institute of Bankers of Nigeria (CIBN), Dr Bayo Olugbemi, said industry consultations following the SEC circular showed broad support for a two-year timeline.

According to him, most stakeholders believe a 24-month period, possibly ending in December, would be more appropriate.

Also speaking, the managing director and chief executive officer of Regius Asset Management Nigeria Limited, Yvonne Akintonide, backed an extension, citing the strain caused by multiple recapitalisation exercises occurring simultaneously across the financial sector.

She noted that banks, pension fund administrators and insurance companies are already recapitalising, with capital market operators expected to support these exercises

The first vice president of the Chartered Institute of Stockbrokers (CIS), Fiona Ahimie, said the timing of the exercise was problematic, even if the absolute capital amounts were not excessive.

She stressed that operators should not be conflicted between executing client transactions and sourcing capital for themselves, adding that extending the deadline was the most practical solution.

On alignment with broader financial sector reforms, Professor Chris Kalu of Nnamdi Azikiwe University and Research Fellow at Cowry Assets Management Limited proposed a two-year window from January 2026 to January 2028.

He said the timeline should be harmonised with the Central Bank of Nigeria’s recapitalisation of money banks, which runs until March 2026.

However, former SEC executive commissioner, Barrister Charles Udora, cautioned against excessive prolongation. Drawing from past experiences, noting that a previous recapitalisation began in 2008 and was not concluded until 2015.

Udora warned that unnecessarily extending the process could expose operators to market downturns, especially since they typically hold shares rather than cash.

Beyond timing, stakeholders raised concerns about proportionality. Olugbemi argued that some of the proposed increases, ranging from 100 per cent to as high as 3,000 per cent, appear disproportionate to the risks faced by certain operators, particularly registrars, trustees and niche players.

He stressed that while no operator disputes the SEC’s right to raise capital requirements, regulation must be balanced with market development.