Nigerian Stock Exchange to acquire NASDAQ price monitoring system: Here’s what you didn’t know

The Nigerian Stock Exchange (NSE), yesterday, announced that it plans to buy a price monitoring system from NASDAQ in order to protect the bourse against market manipulation. This announcement came after market stocks fell by 17 percent in the first month of 2016.

There have been several reforms in the Nigerian Stock Exchange after the 2008 crash. However, the bourse has been able to increase the participation of foreign investors using technology. In addition to this, a former American Stock Exchange senior vice president, Oscar Onyema, has been appointed as the Chief Executive Officer of the NSE. In spite of these changes, the country’s benchmark index has fallen more than 30 percent due to the drop in oil prices globally and this has affected the economy severely.

Ventures Africa spoke with Tinuade Awe, the Nigerian Stock Exchange’s Head of Regulation to find out more about the acquisition and what this means for the bourse. Before the interview, here is what you need to know about the proposed NASDAQ price-monitoring system:

  1. The system will allow the NSE monitor trading activities and provide efficient surveillance of the market. This is in order to detect and deter manipulative tendencies on a real-time basis. The system will also go a long way in assisting the Exchange in upholding its zero tolerance for market abuse.
  1. The system will help in protecting market integrity by ensuring transparency and fairness in price determination. This will enhance investors’ confidence in the market and impact trading activities positively.
  1. The bourse is currently in the implementation stage of the project and the system will become operational on or before the fourth quarter of 2016.

Currently, the Nigerian Stock Exchange is largely driven by technology. This has led to a reduction of inefficiencies in trading activities with attendant reduction in transaction cycle. It has also increased participants’ access to the market via the introduction of Fix technology and technology driven X-initiatives (X-gen, X-Issuer, X-whistle, X-broker and X-boss).

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