10 December 2012

Nigeria: Stockbroking Houses Laud FG Over Forbearance Packages

Lagos — The Association of Stockbroking Houses of Nigeria (ASHON) has commended the federal government's effort in granting forbearance packages to stockbrokers that were affected by margin loan facilities during the financial and banking crisis of 2008/2009.

The association said that over the last 3 years they have solicited for the forbearance on the margin accounts of some of its members with banks now taken over by Assets Management Company of Nigeria (AMCON).

The association believed that this singular act by the federal government gives capital market a lot of hope that the market will begin to play its pivotal role as the engine room for the transformation of the nation's economy.

According to a statement from the association, "We trust that government will continue to look for other ways to resuscitate the capital market to enable it complement the various reform programmes of government and to become an integral component for the growth and development of the economy. According to the association "Our request was based on the premise that for margin accounts where parties made contributions, no party loses more than the contribution it had made. The 'debt' on the margin accounts came about from the fact that banks failed to exercise the margin calls as required by the arrangement in the face of falling share prices.

"We conclude by pledging that our association, working along with other stakeholders in the capital market, will continue to initiate and pursue processes, procedures and policies in the areas of risk management, investors' protection, corporate governance and professional conduct, to ensure there will be no reoccurrence of the situation that led us to this position."

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