{"id":7063,"date":"2026-01-20T08:11:18","date_gmt":"2026-01-20T08:11:18","guid":{"rendered":"https:\/\/ograsset.com\/?p=7063"},"modified":"2026-01-20T08:11:19","modified_gmt":"2026-01-20T08:11:19","slug":"sec-capital-hike-to-spur-mergers-squeeze-smaller-operators","status":"publish","type":"post","link":"https:\/\/ograsset.com\/index.php\/2026\/01\/20\/sec-capital-hike-to-spur-mergers-squeeze-smaller-operators\/","title":{"rendered":"SEC capital hike to spur mergers, squeeze smaller operators"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

SEC capital hike to spur mergers, squeeze smaller operators<\/h1>\n\n\n\n

The Securities and Exchange Commission\u2019s revised minimum capital requirement for capital market operators is expected to trigger mergers and acquisitions in Nigeria, with smaller players likely to exit the market, experts say.<\/p>\n\n\n\n

In a phone interview with The PUNCH on Monday, the Chief Economist and Managing Editor of Proshare, Teslim Shitta-Bey, explained that fund managers and asset managers operate differently from banks. \u201cFund managers take money from third parties. They don\u2019t invest their own money. If I\u2019m managing assets that are in excess of N500 bn, but it\u2019s not my money, why should I be capitalised at N2 bn or N3 bn?\u201d he asked.<\/p>\n\n\n\n

Shitta-Bey stressed that capitalisation requirements designed for banks may not be appropriate for capital market operators. \u201cBanks lend money to third parties, so they need a capital buffer in case loans go bad. Fund managers manage assets on behalf of clients; most of the money they use is not their own. It is intended to purchase assets with a market value that are tradable. So, the nature of capitalisation is different,\u201d he said.<\/p>\n\n\n\n

He noted that many top-tier operators have already exceeded the required capital thresholds. \u201cMany of them already have skin in the game. They have traded on their own accounts. If you value the assets under management, their own assets are far in excess of N2 bn. These are fairly liquid assets that are tradable on an exchange. So, I\u2019ve already met the requirements,\u201d Shitta-Bey said.<\/p>\n\n\n\n

Warning about the potential market impact of overcapitalisation, he added: \u201cIf you have N2bn and you don\u2019t know what to do, you could decide to buy equities. Now, if everybody is buying equities at the same time, you are likely to push up the value of any particular stock. And once the stock becomes overvalued, you are generating a potential for market correction.\u201d<\/p>\n\n\n\n

Shitta-Bey also highlighted the implications for smaller operators. \u201cFor marginal players, yes, there might be some challenges. Well-run smaller ones may merge to meet the capital requirement. Others will gradually exit the system. You will see a lot of mergers and acquisitions going on, but the lesser, smaller ones will just melt out of the system,\u201d he said. The SEC recently issued a circular revising minimum capital requirements across all regulated capital market entities. The move targets core and non-core operators, market infrastructure institutions, fintechs, virtual asset providers, and commodity market intermediaries. For instance, full-scope portfolio managers are now required to maintain a minimum capital of N5bn, while brokers handling client execution only must hold N600m. Compliance is expected by 30 June 2027, with transitional arrangements considered on a case-by-case basis.<\/p>\n\n\n\n

Also commenting, the National Coordinator of the Independent Shareholders Association of Nigeria, Moses Igbrude, criticised the policy, saying it risks concentrating market power and excluding ordinary investors. \u201cStockbrokers do not lend money and therefore do not require massive capital buffers. They receive money from investors to buy shares and manage custody. That is their job,\u201d he said.<\/p>\n\n\n\n

Igbrude questioned the rationale behind requiring N1bn for stockbrokers. \u201cWhy do we need people to come and buy penny stocks or small amounts when I have N2bn at my disposal to trade, pay staff, and run operations efficiently?\u201d he asked.<\/p>\n\n\n\n

He warned that the new requirements could create an elitist market. \u201cYou are creating an elitist investment, cutting off a group of people. If you want to grow an economy of over 270 million people, you don\u2019t cut off your people from the system,\u201d Igbrude said.<\/p>\n\n\n\n

He argued that the policy appears to concentrate business in the hands of a few. \u201cThe Commission is deliberately forcing consolidation. They are trying to remove some categories of investors from the system. It\u2019s only for the big money holders. The Nigerian economy is not only made for the big boys. It\u2019s made for everybody,\u201d he said.<\/em><\/p>\n\n\n\n

Source:<\/em> https:\/\/punchng.com\/sec-capital-hike-to-spur-mergers-squeeze-smaller-operators\/<\/em><\/a><\/em><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

SEC capital hike to spur mergers, squeeze smaller operators The Securities and Exchange Commission\u2019s revised minimum capital requirement for capital market operators is expected to trigger mergers and acquisitions in Nigeria, with smaller players likely to exit the market, experts say. In a phone interview with The PUNCH on Monday, the Chief Economist and Managing… <\/p>\n

<\/div>\n

Read More \u2192<\/a><\/p>\n","protected":false},"author":2,"featured_media":7064,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-7063","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fit-row"],"jetpack_featured_media_url":"https:\/\/ograsset.com\/wp-content\/uploads\/2026\/01\/SSECC.png","_links":{"self":[{"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/posts\/7063","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/comments?post=7063"}],"version-history":[{"count":2,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/posts\/7063\/revisions"}],"predecessor-version":[{"id":7066,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/posts\/7063\/revisions\/7066"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/media\/7064"}],"wp:attachment":[{"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/media?parent=7063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/categories?post=7063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/tags?post=7063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}