By Peter Egwuatu & Providence Obuh

The newly appointed Chief Executive Of-ficer (CEO) of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema has unveiled his agenda to make the Exchange become the gateway to African frontier markets.

In an interview session with capital market correspondents, he revealed some of the changes that have taken place on the Council and the focus of its management team to include: deepening the stock market, integrity, transparency, discipline, adherence to corporate governance principles, amongst others.

Excerpts:

How do you intend to deepen the stock market and when will the new class of investments commence in the market?

Today, we offer equities and bonds in our stock market. Just recently, the Securities and Exchange Commission (SEC) approved for Exchange to undertake Index/Exchange Traded Funds. So in addition to those three, we will be adding options – both equities options and index options and then the last one we are adding is financial features.

In terms of time frame to operate these classes of investment, as you are aware, to introduce a new product, you need to have a market structure, you need to have technology, you need to have rules, a pricing structure that works, we need to educate the investor class – both institutional and retail investors – about how to use these assets to boost their portfolios. So in realistic time line, it will not be anything less than two years for options and financial features.

However, if you want to start trading those products in two years, we have to start now because there is a lot to be done to actually start trading them.

What is the latest development on the recapitalisation of the stockbroking firms?

As you know, there was a list of about 58 to 60 stockbroking firms that were suspended because they did not meet N70 million minimum requirements, a bunch of these stockbroking firms have since gone back and recapitalised and have been removed from the suspended list, some of them have gone back to modify their registration from broker-dealer registration to just broker registration which has a lower capital requirement. I think there are about 38 that are still on the list that are yet to recapitalise. So out of 58, 20 have done what they need to do and are no longer suspended.

You did say 10 new members will be added to the Council of the NSE, are they already added and who are they?

On the Council membership, we have a list of the ten adopted council members that have been approved by the Council. The ten council members that were coopted into the Council after May 12, 2011 meeting include: Mrs Yemisi Ayeni, Managing Director, Shell Nigeria Pension fund Administrator Limited, Mr. Hassan Usman, MD Aso Savings and Loans Plc , Mr. Abubakar Mahmoud, Dikko and Mahmoud Solicitors and Advocates, Mr.Bimbo Ogunbanjo, Partner, Chris Ogunbanjo and Co., Mr Bismak Uwani, MD Financial Derivatives Company Limited, Mrs Dorothy Uford, SAN, Principal Partner Dorothy Uford and Co., Alhaji Garuba Kofo, MD ATP Securities and Funds Limited. It is the firms that are co-opted and not the individuals,

At the dinner organised for Mr Emmanuel Ikazoboh, we were told that he remains the Chairman of CSCS Limited and we know by rules of the Exchange, when the former D-G was around, she was the Chairman of CSCS and now that you have come on board, how soon are you going to take that position?

As you know, there was a forensic audit that was conducted by the Interim Administration on CSCS as well, he remains the Chairman in order to round off that process and at the completion of that process, I would then join that Board as the Chairman given the usual practice. I’m aware that there are several efforts to actually change some of the composition of that Board to allow for additional membership from the Exchange given our shareholding on that Board.

At the dinner with the Interim Administrator, we were made to understand that the cases with the Nigerian Stock Exchange and other Ex-officio’s of the Exchange pending with the court will be withdrawn and settled out of court, the following day we got information circulated on the pages of newspapers that the NSE is also suing Okereke-Onyiuke and some others, we became very confused. Which information is correct? Are we expecting the case to continue or that the information of settling out of court is still standing?

Our view as the new management team is really forward-looking, we believe that we want to emphasize the opportunities that abound in the Nigerian Capital Market, and also we want to make sure that we focus on creating a capital market that meets global standards, to the extent that if there are any infractions, the Exchanges and regulators everywhere would make sure that they deal with those infractions according to legal and ethical ways of addressing the infractions.

For us, it is going to be different, we are going to pursue all avenues that are legal in addressing these court cases, some of them may run their course, some of them may end up being settled, the Exchange itself is not the only party to a lot of these cases and in most cases, we are not the one driving the cases and each case has a different aspect to it, but I think the answer gives you a general overview of how we are likely to approach these cases.

The last time we were with the Interim Administrator, he told us about migration from trading platform to a new trading platform and soon after that, we never heard anything about that again. Sir, I want to know if are we still using our old trading platform or we’ve migrated to the US or UK trading platform as we were made to understand.

We are using existing trading platform, Horizon, we have not changed the trading platform yet. The Exchange made decision late last year to begin to have serious conversations with NASDAC OMS as the provider of our new trading platform.

We are in the process of making sure that the business requirements reflect not only current practices but the kind of market innovation that we want to bring into this market. For example, we are looking to introduce market makers that will actually help us in improving liquidity and depth in the market place. I have talked about facilitating securities landing by making sure that we have the ability to do short selling in our market place, we want to bring in sponsored access so that global broker dealers that want to play in our market can access our market being sponsored by local broker dealers.

There are so many other things that we want to include in this technology platform, opening option, a closing option so that when we hit the five per cent band, we would actually conduct an option before going. The new technology platform has also got to take into consideration the need to modernise the market and we make sure we are transparent in the process and keep you abreast of developments in that area.

We are really interested in knowing who the chairman of the Demutualisation Committee is.

The Demutualisation Committee is going to be chaired by Yemisi Ayeni. She is the MD of Shell Pension Fund Administrators. As you know, they are independent in their relationship with the Exchange. So the Council felt that she would be the best person that will bring integrity to the process and also she doesn’t have any stake in the game, so she will bring international best practices to bear in the process and again, the firm that she is working for is known globally as a very strong firm.

What is the Exchange doing to moderate the discrepancies between foreign and local companies?

The Exchange is always looking to list good quality companies, it doesn’t matter if they are foreign or local, and if a company is good, and when I say good, I mean operating in a very profitable manner, investors are going to vote with their naira to go to those companies, so the Exchange cannot legislate or come up with rules that say investors have to buy into a particular company. It is a very democratic process. Investors will vote with their money where they will get best returns.