Onome Amuge
Operators in Nigeria’s capital market are calling on the Securities and Exchange Commission (SEC) to extend the deadline for the ongoing recapitalisation of regulated market entities from June 2027 to December 2027, citing election-year uncertainties, concurrent financial sector reforms, and operational strain.
The request emerged during 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.” Participants scrutinised the revised capital requirements, noting the significant increases across broker-dealers, brokers, dealers, and sub-brokers.
Under the updated framework, broker-dealers are required to maintain N2 billion, brokers N600 million, and dealers N1 billion in capital. Digital sub-brokers now need N100 million, while corporate sub-brokers must hold N50 million, up from N10 million previously, a 400 to 5,000 percent increase for some segments.
While acknowledging the necessity of recapitalisation for market stability, Uche Uwaleke, CMAN president, warned that the 18-month implementation window ending June 2027 may be too short, particularly given the electoral context. “2027 is an election year, typically characterised by uncertainty and defensive investor behaviour, which could make capital mobilisation difficult,” he said. Uwaleke proposed a 24-month timeline, ending December 2027, to better align with market realities.
Supporting this position, Bayo Olugbemi, past president of the Independent Capital Market Registrars (ICMR) and the Chartered Institute of Bankers of Nigeria (CIBN), said broad industry consultations revealed strong backing for a two-year timeframe. “Most stakeholders believe a 24-month period would be more appropriate to ensure compliance without undue pressure on operators,” Olugbemi noted.
Other industry leaders echoed these concerns. Yvonne Akintonide, managing director of Regius Asset Management Nigeria, pointed to the strain of concurrent recapitalisation exercises across the financial sector, including banks, pension fund administrators, and insurance firms. She warned that operators already navigating capital demands from multiple regulatory bodies would struggle to meet the SEC’s timeline.
Fiona Ahimie, first vice president of the Chartered Institute of Stockbrokers (CIS), added that the timing could force operators to choose between servicing clients and raising capital for themselves, further justifying an extension as the most practical solution.
Academics also weighed in. Chris Kalu of the Nnamdi Azikiwe University proposed a two-year window from January 2026 to January 2028, aligning the recapitalisation timeline with the Central Bank of Nigeria’s ongoing bank recapitalisation, which concludes in March 2026. Harmonising these exercises, he argued, would reduce operational pressure and market risk.
Not all experts supported delaying the process. Charles Udora, former SEC executive commissioner, cautioned against excessive prolongation, citing a 2008 recapitalisation that extended until 2015, which exposed operators to market volatility. “Operators typically hold shares rather than cash, so stretching timelines unnecessarily can increase exposure to downturns,” he warned.
Beyond timing, proportionality emerged as a key concern. Olugbemi highlighted that some increases, ranging from 100 per cent to 3,000 per cent, appear disproportionate to the actual risk faced by certain operators, particularly registrars, trustees, and niche players. “While there is no dispute over the SEC’s right to raise capital requirements, regulation must balance prudential safety with market development,” he said.
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