7 November 2012

Nigeria: SEC to Boost Secondary Market With Bond Trading

The Secondary market trading of government and corporate bonds on the Nigerian Stock Exchange (NSE) will receive a boost in 2013 following efforts by the Securities and Exchange Commission (SEC) in that direction.

Currently, secondary trading of bonds goes on through the over-the-counter (OTC) market. However, the Director-General of the SEC, Ms. Arunma Oteh, has disclosed that the Fixed Income Sub-committee of the Capital Market Committee (CMC) set up by the commission last year, is collaborating with other stakeholders to ensure that trading in bonds on the exchange is achieved next year.

According to her, the committee led by NSE with members from Debt Management Office(DMO), and National Association of Securities Dealers(NASD), is working to realise the introduction of market-making for debt securities particularly the illiquid corporate and sub-national securities.

She said already the draft securitisation rules in that regard were being reviewed.

Besides, she added, securities lending and trading in the Asset Management Corporation of Nigeria (AMCON) bond was being exploited by the committee.

"The capital market will engage AMCON, Central Bank of Nigeria (CBN) and Financial Markets Dealers Association (FMDA) in discussions to stimulate market-making on AMCON bonds both in the inter-bank market and the trading exchanges," Oteh said.

The SEC boss added that the National Pension Commission (PenCom) and other relevant trading exchanges are also be engaged on securities lending. According to her, the relationship would lead to a robust and efficient operating framework for securities lending would be set up.

The Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, had last week, said the exchange was also intensifying efforts to ensure retail bond trading on the exchange.

He said that having arranged the technology aspect of the issue, the exchange was now working on fixed income market-making programme.

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