By Tony Obiechina, Abuja
President of the Capital Market Academics of Nigeria (CMAN), Prof. Uche Uwaleke, has expressed strong support for the Securities and Exchange Commission’s (SEC) proposed recapitalisation of regulated capital market entities, describing it as a critical step toward strengthening market resilience and protecting investors.
Speaking during an interview on the new minimum capital requirements for capital market operators and infrastructure players, Uwaleke said the current framework, which has been in place since 2015, is no longer fit for purpose.
Uwaleke who is also the Director of the Institute of Capital Market Studies at Nasarawa State University said, “I support the recapitalisation of market operators and infrastructure players. It is obvious that the current framework put in place in 2015 has become obsolete in view of the fall in the value of the naira and recent developments in the fintech space.”
He explained that the exercise aligns with the SEC’s core mandate of investor protection and long-term market stability.
“This is in the interest of capital market resilience and investor protection, which is the primary responsibility of the SEC,” Uwaleke added.
However, the capital market scholar stressed that the success of the exercise would depend on how some key elements of the framework are implemented. One of such areas, according to him, is the proposed timeline for compliance.
Under the SEC’s plan, affected entities are expected to meet the new capital thresholds by June 2027, giving operators an 18-month window to comply.
While acknowledging that the timeline broadly reflects global practice, Uwaleke warned that it coincides with Nigeria’s 2027 general election cycle.
“Although the June 2027 deadline aligns with international practice, it coincides closely with the 2027 election period, which historically comes with heightened uncertainty and more cautious capital deployment by investors,” he noted.
Against this backdrop, he recommended a modest extension of the deadline.
“I would therefore recommend that the deadline be extended to December 2027 to enhance the likelihood of a successful recapitalisation exercise,” he said.
Uwaleke also urged the SEC to revisit its approach to fund and portfolio management by recognising the differences between conventional and non-interest models.
According to him, both operate under distinct risk profiles and business dynamics, making a uniform capital requirement inappropriate.
“There is a need to distinguish between conventional and non-interest fund and portfolio management models. Just as the Central Bank of Nigeria did during the banking sector recapitalisation, the SEC should reflect this distinction in its framework,” he advised.
Beyond capital adequacy, the professor cautioned against possible unintended structural consequences of the recapitalisation programme, particularly for indigenous operators.
“The Commission should also put measures in place to address potential unintended consequences, such as reduced competition and diminished geographical reach of capital market services, especially among indigenous firms and operators outside Lagos and Abuja,” he warned.
He emphasized that early identification and mitigation of these risks would strengthen the overall outcome of the exercise.
“A thoughtful consideration of how these risks can be mitigated from the early stage, while still preserving the SEC’s objectives of stability and investor protection, will add significant value to the recapitalisation programme,” Uwaleke said.
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