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Nigeria to commence 24 hours trading settlement cycle

By Peter Egwuatu & Providence Obuh

For the first time in the history  of any capital market in Africa, Nigeria is set to commence 24 hours trading settlement circle, even as investors in the Nigerian Capital market are now to get dividend payment within 24 hours through the e-Dividend Payment Platform.  Director General of Securities and Exchange Commission (SEC) Mounir Gwarzo made this disclosure at the e-Dividend Sensitisation Town Hall Meeting in Lagos.
According to him, the proposed system will automatically allow dividends to be credited directly into shareholders’ accounts within 24 hours of payment by the company. Gwarzo stated that this was one of the initiatives being implemented by the commission as part of its 10 year Capital Market Master Plan to encourage retail investors to return to the market and thereby deepen the market.
According to him “One of our strategies is to target the retail investor, the only way we can deepen the market and ensure that the market is within our own grip is to ensure that the retail investor comes into the market. It is only the domestic investor that no matter the condition of the market, will stay with us, what we have been experiencing in the market is the dominance of the foreign investor where anytime they want to move out of the market they get out and anything they want to come in they do so.

Seeing what happens in the market, we decided that the best thing it to get the retail investor and our approach is not to go to them and be telling them to come back.  “But our approach is to identify the issues why they are not in the market and deal with such issues. If you meet any retail investor, he is going to complain about not getting his dividend. So how do we address some of these issues and that brought about the issue of Road Show where we meet the retail investors one on one and tell them why they need to key into the e-dividend. It has been quite successful so far”.
“We have achieved something that is very unique, even South Africa they have t+5, where when you do transactions you cannot get payment until five days. But with this system, we are going to achieve t+1 settlement system. You sell shares by today, payment are effected within 24 hours which is going to be the first capital Market in Africa. No market in Africa has experienced that before and we are determined to ensure that it is achieved.
In his remarks, the Executive Director Market Operations and Technologies of the Nigeria Stock Exchange (NSE), Ade Bajomo commended SEC in its quest to ensure that every Nigerian that invests in the market gets what is due them in good time.
“The SEC is willing to stand by their reputation. The message is that the market is for all Nigerians and the regulator is putting in the right processes to ensure that investors get what they are entitled to. By this action, the Commission is sensitising Nigerians and the bare going all out to do so in order to grow the market” he said.


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