NSE Kicks Off Market Making Programme

 

As part of activities heralding the kick-off of the Market Making initiative, The Exchange has concluded arrangements to facilitate a market-wide workshop on September 11, 2012 to intimate market stakeholders with the rules and operational guidelines for the programme.

According to the head of Transformation and Change, Mr Olumide Lala, the workshop will bring together experts in Market Making, Securities Lending and Short Selling with other key capital market participants such as settlement banks, Pension Fund Administrators, Insurance companies and companies listed on the Exchange to name a few. 

Offering an insight on the initiatives, Lala explained that the Market Makers will play a central role in the provision of two-way quotes (comprising of buy and sell prices) for the securities that they are making markets on. Leveraging the Securities Lending process, Market Makers will be able to borrow securities in order to settle ‘buy order imbalances’ from customers. A ‘hybrid’ market, allowing both market makers to provide two way quotes and licensed broker/dealers of The Exchange to submit orders as is currently done, will be operated from the commencement date of this key initiative.

Rationalizing the importance of Securities Lending in the Market Making initiative, Lala said that it would provide for lending and borrowing of securities which in return will enable investors earn returns on their ‘idle’ stocks whilst contributing significantly to market liquidity and price efficiency through legitimate investment activity in covered Short Selling.

Lala also revealed that over 300 participants are expected to take part in the workshop and they will be drawn from various professional bodies, associations and key stakeholders in the market.

It would be recalled that the Nigerian Bourse announced the names of the Market Makers on the trading floor of The NSE in the second quarter of 2012 following a rigorous selection process, where the unveiling of the ten (10) broker/dealer firms selected as Market Makers was described by the Chief Executive Officer of The Exchange, Mr Oscar Onyema, as a major landmark in enhancing the liquidity and depth of the second largest market in sub-Saharan Africa.