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Asset custodians to partner SEC, NSE on market automation

By  RITA OBODOECHINA

The Association of Asset Custodians of Nigeria has expressed its readiness to partner with the Securities and Exchange Commission, SEC, Nigerian Stock Exchange, NSE and the Central Securities Clearing System, CSCS, to ensure a fully automated and electronic capital market.

Speaking at its First Annual General Meeting in Lagos, Mr. Segun Sanni, President of the Association, stated that the ultimate aim of the partnership is to simplify and develop the transaction processes.

He decried the fact that the trading process in the Nigerian capital market is still bedeviled by cumbersome paper-work, a development that is contributing to hindering the growth of the market.

According to him, at a time when many countries and economies had gone beyond ‘paper-transactions’ the capital market was still involved in a large amount of paper-documentation.

He said, “It is sad to note that even though the capital market is said to be a dematerialised market, such dematerialisation ends in the trading floor, this is because most of the processes that lead to the buying and selling still involves a lot of paper-work.

“And so, we need to change this whole outlook, because it seems there is a lot of paper documentation still ongoing in our market, even though we say we are running an electronic market system.”

Sanni further stated that the association is committed to ensuring the success of securities lending and other new initiatives introduced in the market.

He said, “The Association had been proactive since its creation in 2010, and had come up with a lot of policies that have helped to boost the capital market within the last year.

“In the last year, we partnered with SEC and NSE to put together a couple of policies that have been effective and facilitated the growth of the market, for instance, we helped to build the process of securities lending in our market.

“We did our homework and found out that this process had worked for a number of countries and we needed it especially after the down-turn that was recorded in our market a few years back. We realised that as a market, the NSE had the critical mass to take on this process.

“The process has been in the pipeline for a number of years, but it was never really undertaken, so we as an association felt it would be more effective to push for the commencement of the process as a body rather than as individuals, and the outcome has brought about the launch of a process that has boosted our market in the last few weeks.”

Continuing, Sani noted that it is set to partner with the Central Bank of Nigeria, CBN, in an attempt to ensure that the Certificate Capital Importation process was fully automated.

According to him, this would help to ensure that the foreign investors had more security in their transactions, because they have raised a number of fears over the safety and security of the paper-nature of the current certificates issued to them.


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