SEC to develop more commodity exchanges

The Director-General of the Securities and Exchange Commission (SEC), Mounir Gwarzo has restated the commission’s resolve to promote the development of Commodity Exchanges in the country.

Speaking when he received the New Exco of the Association of Stockbroking Houses of Nigeria(ASHON) on a courtesy call at the commission on Monday, the Director General said the commission was willing to support the Lagos Commodities & Futures Exchange being midwived ASHON.

On the suspension of some of their members by the NSE & SEC on account of deficiency in Minimum Operating Standard (MOS) compliance as well as diminution in value of minimum capital requirement, the DG insisted on a three months grace period, aligning with their argument that stock brokers carry equities in their balance sheet and prices of equities have gone down thus affecting their capital

the DG insisted on a 3 months grace period.

ASHON through its Chairman, Patrick Ezeagu had solicited for the possibility of increasing the grace period to 6 months to recapitalize or reclassify.

The Group noted with concern also the proposed amendment of Rule 56(1) - Function of Brokers(Harmonization of Registration requirement for incidental functions). The development will preclude brokers from providing Investment advice to their clients/ Public.

ASHON, while acknowledging not knowing the thinking behind the proposed amendment, solicited for the reconsideration of the proposal. The call is based on the backdrop of the so called value addition provided by brokers/ dealers in providing investment advice to their clients. They argued that a lot of stock broking houses had well established research desks that not only help to broadcast market information on a continous basis but also carry out indepth analysis and provide opinions to complex financial issues to their clients.