The long-awaited plans to demutualise the Nigerian Stock Exchange was given a boost on Monday, as the Securities and Exchange Commission said it would be coming out with rules governing it in the next few weeks.

The Chairman, SEC Board, Dr. Suleyman Ndanusa, announced this at the inauguration of the NASD Over-the-Counter market in Lagos on Monday.

He said the demutualisation of the NSE would go a long way to improve activities in the market.

Demutualisation, which is an international trend, is the process of converting exchanges from non-profit, member-owned organisations to profit, investor-owned corporations. It is seen as a trigger for the restructuring of stock exchanges, because it opens membership to new investors and changes the focus of exchanges.

Ndanusa also explained that with the approval of SEC, the NSE was set to come up with another trading platform that would deepen activities in the market and ensure seamless transactions for investors.

He said, “The Nigerian capital market has witnessed a lot of developments and more will be coming soon. For instance, rules relating to sukuk bonds, retail bonds trading, securities lending, private equity funds have been issued in the last few months.

“Also, rules relating to the demutualisation of the NSE will be exposed to the market in a few weeks time; and very soon the NSE will introduce a new trading platform that will ensure a more efficient settlement of transactions.

 ÃƒÂ¢Ã¢â€šÂ¬Ã…“SEC will continue to encourage more openness so that our public markets are more inclusive; better transparency so our markets are better informed; encourage better connectivity so that our markets are more efficient; and above all, avoid unneeded regulatory burden that could create high cost and complexity on smaller public companies,” he said.

Speaking on the NASD platform, Ndanusa said the move would go a long way to improve activities in the Nigerian capital market, as it would deepen the market and reduce the challenge of illiquidity in the market.

 ÃƒÂ¢Ã¢â€šÂ¬Ã…“The NASD OTC market is of interest to the SEC as it will expand opportunities for all market participants, investors and for the rapid development the economy, and it will also offer the opportunity for trading on wide range of instruments including unlisted securities,” he said.

Chairman, Board of Directors, NASD, Mr. Olutola Mobolurin, said that beyond providing an avenue for transparent price discovery for all securities traded in the market, NASD OTC would open a new vista for the expansion of the primary market for securities.

“As we all know, it is the existence of a secondary market that assures investors that they can exit investments acquired in the primary market at any time they desire,” he said.

Source: Punch (by udeme Ekwere)