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SEC grants NASD approval -in – principle to operate OTC market

By PETER EGWUATU
The Securities and Exchange Commission (SEC) has granted NASD Limited an Approval-in- Principle to operate Over-the- Counter market.

Chairman of NASD, Mr Olutola Mobolurin, who disclosed this, said the company plans to launch an Over-the-Counter (OTC) trading platform in Nigeria.

According to him “ NASD recently concluded a successful rights issue to shore up its capital in support of its application to SEC for an approval-in-principle to operate an OTC.

On the back of the successful rights issue and the Approval-in-Principle granted by SEC, the company is currently putting finishing touches to its start_up and operational take off of the Company and the construction of a mordern trading platform to facilitate the trading of qualifying OTC-traded debt and equity instruments.”

NASD Limited was formed on the 1st of June 1998 to promote and operate an OTC market open to all interested, registered securities dealers in Nigeria.

The company is to be a provider of pricing, information and trading platform for equity and debt securities and other derivative instruments traded on an over-the-counter (OTC) basis in Nigeria. It would complement The Nigerian Stock Exchange by being the self-regulatory organization for all securities firms that conduct business on its OTC platform.

In explaining the vision of the company, Mobolurin explained that “the market in OTC securities in Nigeria is at the onset of an unprecedented growth phase. As the economy continues to expand, not only will the size and depth of the bond market increase, many more companies will seek access to capital from a broad spectrum of investors.

The liquidity, transparency and integrity that the NASD’s OTC platform will afford all investors will make NASD the pricing information and liquidity provider of choice for OTC trading of various types of securities.”

“NASD will 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. It would also 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” he noted.

The company, through its NAQ platform, will provide trading and price discovery systems for equities, bonds and other derivative instruments. Specifically, it will provide facilities that allow dealers and investors to discover prices, report OTC trades and create markets for otherwise illiquid securities via an advanced quote-driven market making system.

Mobolurin stated that the days of arbitrary pricing of unquoted securities were over, adding that no one needs to be cheated any longer. “Prices of all traded unquoted securities will be provided on-line. In addition, the platform will afford Securities and Exchange Commission the basis for enforcing the law prohibiting the trading of securities by unregistered parties. Investors will no longer depend on company officials to help them buy or sell shares of any company. They will have professionals who will be regulated by both NASD and SEC to ensure they act with utmost integrity and commercial honour at all times.

“While the company has received expressions of interest of technical partnership from globally renowned technology and market systems vendors and operators with experience in other emerging markets, the Board of the company intends to open up the process to ensure that the platform eventually chosen will be second to none” he stated.


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