ICMR seeks regulatory permission to earn fee on all secondary market transactions
Bemoans harsh operating condition
Institute of Capital Market Registrars (ICMR) have urged the regulatory authorities to permit registrars operating in the nation’s capital market to earn fee on all secondary market transaction.
The secondary market is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold.
The Registrar Chief Executive, ICMR, Walker Ogogo, who spoke in an interview with The Guardian, lamented that registrars currently do not earn fees on secondary market transactions, while other market operators earn a percentage of the value of transactions.
According to him, if the regulators grant the permission, it would go a long way to improve the income and enhance their operations.
“The regulators should allow registrars to earn a fee on all secondary market transactions. This will go a long way to improve the income of registrars.
“Currently, registrars do not earn fees on secondary market transactions. Other capital market operators earn a percentage of the value of transactions,” he said.
Concerning some of the challenges facing the operations, Ogogo explained that registrars are grappling with dwindling income, even as some clients firm are shutting down their businesses due to unfavorable operating environment.
The President of the institute, Bayo Olugbemi explained that the registrars were not insulated from the harsh operating environment witnessed in the country.
He pointed out that the equity segment of the market has remained flat with no new offering, either rights issue or public offer.
“The registrar subsector of the capital market has also been affected adversely by the challenges being faced at the macro level. There has been little or no activity in the capital. The equity segment has been flat with no new offering, either rights issue or public offer.
“In the bond segment, because of high-interest rate applicable at a short end of the market, issuers have not been willing borrow money at such a high rate and again, investors, apart from the pension fund, do not have the resources to actually lock in long term instrument. The implication for us is that there have been no new registers.”