The full remote trading activated by the Nigerian Stock Exchange (NSE) last month may encourage direct transactions by interested investors, the Chairman, the Chairman, Association of Securities Dealing Houses of Nigeria ( ASHON), Chief Onyenwechukwu Ezeagu, has said.
The NSE had last closed its trading floors as part of efforts to curtail the spread of the COVID-19.Since then, stockbrokers have been trading in the market via remote access.
Speaking on state of the market, Ezeagu said some investors may trade directly taking advantage of the current situation. The NSE’s dynamic trading configuration enables an investor to execute transaction by using access code, generated by his stockbroking firm. But in order to prevent abuse, the stockbroker is responsible for the investor’s transaction in the event of any query from the market regulators.
He explained that the policy of allowing clients to trade directly through their stockbroking firms was expected to be more operational under the current trading regime whereby all stockbroking firms trade remotely.
Ezeagu noted that one of the benefits of full remote trading was that investors would no longer insist on seeing their stockbrokers physically. According to him, one of the rules of engagement for allowing an investor to trade is that such transaction must be routed through his stockbroking firm which is directly answerable to NSE.
“The full remote trading is normal as many of our dealing member firms had been trading remotely over the years before the sudden advent of coronavirus. The current trading atmosphere is a learning curve for the clients. Many of them that enjoy dealing with stockbrokers physically may begin to trade themselves. But they can do this through an arrangement with their stockbroking firm, being a member of the exchange, Exchange,” said Ezeagu.
Also speaking, Managing Director and Chief Executive Officer, Network Capital Limited, Mr. Oluropo Dada stated that it was a welcome development for a client to trade directly. He said it would relieve the stockbroking firm of burden and the transaction will still go through the stockbroking firm.
Dada stated that the ongoing remote trading was an indication of the NSE’s global stature, noting that the current situation had made opening of accounts for new clients difficult as Know Your Client (KYC) could not be fully conducted.
But commenting on the market situation, the Managing Director and Chief Executive Officer, Compass Investment and Securities, Mr. Emeka Madubuike decried the implications of uncertainties on investors’ ability to make investment decision.
Madubuike explained that institutional investors might have likely accounted for the bulk of transaction at the moment as many individual investors may adopt wait and see attitude. He, however, expressed optimism that NSE’s remote trading was going on without encumbrance.