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NSE directs brokers to withdraw accounts

Category: Money Market

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NSE directs brokers to withdraw accounts



August 09, 2011 / Sources Acknowledged
The Nigerian Stock Exchange (NSE) yesterday, allegedly advised stockbroking firms and dealing members to withdraw their settlement accounts from the three nationalised banks.
According to reports from the Vanguard “the NSE held a meeting with stockbroking and dealing members where the issue of the three nationalised banks was discussed. Sources at the meeting confirmed to Vanguard that the NSE directed stockbroking firms and dealing members operating settlement accounts in any of the affected banks to move their accounts to other safe havens”.
Confirming this development, the chief executive of a stock broking firm who pleaded anonymity told Vanguard “The meeting with Stockbrokers this morning centred on nationalization of the banks. Dealing members were informed that the stocks will be placed on full suspension preparatory to delisting since they no longer qualify to be listed. Dealing members were requested to move their settlement accounts from those banks to other PLC banks in line with the policy of The NSE”.
A broker, who was part of the meeting, said that Onyema told them to move their settlement accounts from those banks to other public limited banks in line with the policy of the Exchange.
Corroborating the directive, the Chief Executive of another stock broking firm said the directive was part of the steps to delisting the banks and was necessary to protect the settlement system from whatever happens to the banks. “It is a natural reaction in this kind of situation. Just like individuals would move away their account for security so also the market has to be protected from any disruption that could arise from the new status of the banks.”
Meanwhile the NSE yesterday commenced moves to delist the three banks. The NSE, in a statement signed by Mr. Wole Tokede, Head, Corporate Communications, Monday, announced the suspension of trading on the shares of the banks, saying that, “This is the first step towards their delisting from the Daily Official List.”
Tokede said that the delisting becomes necessary since the banks no longer exist, following the revocation of their licenses by the CBN.
He, however, said that transactions in the shares of the three banks up to and including Friday, August 5, 2011 will be allowed to settle and also assured the investing public that the NSE will continue its efforts at protecting investors in the capital market.
In close, shareholders of the three nationalised banks have lost N30 billion worth of investments in the three banks on the bourse based on their closing prices yesterday, when the shares of the three banks were placed on full suspension by the SEC (regulators) and not the NSE (market owners).

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