May 29, 2022

SB-Accounting

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NSE begins Automation of shares rights and settlement

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The Nigerian Stock Exchange (NSE) has automated the sell of shares rights giving to shareholders. This will take effect from 5th of May, 2017. Before now, shareholders sell their shares rights manually. With the use of automation, shareholders can sell subscription rights both efficiently and at fair prices.

Mr. Ade Bajomo, the Executive Director, Market Operations and Technology, NSE,  said, “The automation of Rights trading and settlement in the Nigerian capital market will enhance price discovery as rights can now be traded and re-traded without settlement complexities. It will help eliminate operational challenges resulting from manual trading and cash settlement between counterparties, whilst simplifying counterparty trade reconciliation between the brokers, registrars and the NSE”.

Explaining the Rights trading and settlement process, Bajomo remarked that “for an investor to be eligible to participate in rights trading, he/she must have a CSCS account set up through a licensed Dealing Member firm of the Exchange. In addition, the investor must fund his/her broker with the consideration value, premium and transaction fees, prior to execution of his/her mandate”. 

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