SEC’s recapitalisation plan deadline, responsible regulatory approach — Uwaleke

SEC's Recapitalisation Plan Deadline Sparks Industry Reaction

A six-week deadline issued by the Securities and Exchange Commission (SEC) to capital market operators to submit plans for recapitalisation or face license downgrade has sparked a mix of reactions in the industry. The move is seen as a bid to strengthen the Nigerian capital market and align it with global standards. According to industry experts, the deadline is a clear signal that the regulator is serious about tightening the definition of regulatory capital and ensuring that the capital base is genuine and loss-absorbing.

Prof. Uche Uwaleke, President of the Capital Market Academics of Nigeria (CMAN), has welcomed the move, describing it as a responsible regulatory approach. He notes that the deadline is a sign of seriousness and a push towards discipline, transparency, and long-term stability in the market. The CMAN president believes that a healthy market is built on the back of healthy institutions, and that operators with the financial muscle to support growth are crucial for financing infrastructure deficits in the country.

Nigerian capital market firms have been given a clear directive to engage their boards and develop realistic recapitalisation plans backed by credible funding strategies. The CMAN president has urged firms to be honest about their capacity and not overstretch themselves in a bid to meet the new thresholds. He sees the move as an opportunity for firms to recapitalise and become better positioned to expand, innovate, and compete in the market.

The deadline for submission of plans is looming, and it remains to be seen which firms will take the necessary steps to meet the requirements. Those that fail to do so risk facing license downgrade, which could have far-reaching consequences for their operations.