OTC Market: NASD Settles for NSE Trading Platform

17 Oct 2012

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NSE office

Goddy Egene
NASD Limited, a company given approval by the Securities and Exchange Commission (SEC) to operate Over-the-Counter (OTC) market in Nigeria, has decided to use the trading platform of the Nigerian Stock Exchange (NSE), THISDAY checks have revealed.

THISDAY had last June reported that NASD Limited was finalising its trading rules and had shortlisted three vendors for the trading platform from the 11 that applied.
However, it was gathered that the company has settled for the NSE trading platform, just as the facilities of the Central Securities Clearing Systems Plc (CSCS) would be used to clear transactions in the OTC market.

Sources said that after weighing the options, especially the financial and time implications, the Board of NASD opted to connect to the NSE trading platform, since the operations of the OTC market would complement that of the exchange.

A director and Chairman, Technical Committee, NASD Limited, Mr. Victor Ogienwonyi, confirmed this development to THISDAY last Monday. According to him, the OTC will be configured to trade the way trades are done on the exchange.

“The only difference is that, we will trade in unlisted securities, Federal Government and corporate bonds when we commence. Also fixed income and commercial papers will follow,” he said.

Ogienwonyi disclosed that Board of NASD would soon meet to fine tune the business plan and approve the final take-off time, once testing, which has commenced, is concluded. He said the company has recruited some staff members and a chief executive officer.

Before now, Ogienwonyi had said that NASD Limited’s intention was to have an all-asset trading platform that will trade from simple money market instruments like commercial paper through equities to bonds, including simple derivatives like foreign exchange options and futures.

“Our intention is to trade all non listed public liabilities companies (PLCs) in a very transparent manner thereby expanding the market for securities and complementing the NSE,” he said.

Although the company has settled for NSE platform, he said this intention remains intact since the exchange is expecting a new platform that would be delivered next year. “We are starting with the existing one (NSE trading platform) and we will migrate to the new one when that is ready,” he said.

NASD Limited was formed in 1998 to promote and operate an OTC market open to all interested registered securities dealers in Nigeria. The company got an approval-in-principle (AIP) from SEC last year.

Apart from facilitating trading in the securities of non-listed firms, NASD Limited would also provide capital raising windows to all qualified public sector and corporate entities especially small-to-medium sized companies seeking to raise capital and for investors seeking to trade existing securities on a transparent platform.

Operations of NASD Limited will equally provide a liquidity window for investors and fund managers who invested in public unquoted companies and expand opportunities for Pension Fund Administrators who are required to invest only in publicly traded securities.

Tags: Business, Nigeria, Featured, NSE, NASD, OTC Market

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