NGX Admission on NASD May Improve Investor Confidence in the OTC Market

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Tuesday, April 20, 2021 / 10:05 AM/ Ottoabasi Abasiekong for WebTV / Header Image Credit: Ecographics


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The admission of the shares of the demutualized Nigeria Exchange Limited (NGX) on the NASD exchange will boost investor confidence in Nigeria's OTC market. Ifeoma Uba-Onubogu Head, Legal and Compliance, NASD Plc made the point in a conversation on "NGX Shares Admission on NASD Platform: Implications for Nigeria's OTC Market".

 

She believed that it also underscored the importance of having companies that are ready to adhere to the rules and regulations guiding the unlisted securities or over-the-counter (OTC) market.

 

Speaking further she stated that this step would encourage issuers of unlisted securities in the country, to list on the OTC market.

 

In terms of capitalization, the NASD official was of the view that the NGX shares will definitely boost the market and also have a positive impact on the NASD Securities Index,  NSI.

 

For clarification, she said that the shares would reflect on the NSI in three months. This according to her would bring order and stability to the OTC market.

 

On the recent circular of the Securities and Exchange Commission (SEC) cautioning on the "Proliferation of Unregistered Online Trading Platforms Facilitating Trading", she acknowledged that the apex capital market regulator was well within its mandate to provide effective guidelines and rules.

 

She believed that innovation, especially by fintech companies, was here to stay and called on SEC to expedite steps in publishing guidelines for licensing online trading platforms.

 

The NASD's Chief Compliance Officer emphasized the need for SEC to create an enabling environment that encourages the growth of digital platforms and fintech companies.

 

Reviewing the activities of the NASD, Uba-Onubogu said the exchange was focused on serving as an innovative capital raising market, with initiatives like 'Venture Ramp', and the 'Crowdfunding Portal' awaiting the SEC's approval.

 

Other areas that would receive continued support and priority include;

  • Strengthening the N-ELTS trading platform
  • Developing a robust private markets segment to encourage businesses
  • Revamp its NASDEP, NASD Enterprise Portal (Cloud-based) to support SMEs that are seeking to raise capital.

 

She called on the Federal Government to support the efforts of the SEC and the Capital Market Master Plan (CMMP) especially in the area of secondary market (OTC) activities.


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