Post Views: 1,162 The Nigerian Stock Exchange (NSE) in conjunction with Fund Managers Association of Nigeria (FMAN); Association of Stockbroking House...
The Nigerian Stock Exchange (NSE) in conjunction with Fund Managers Association of Nigeria (FMAN); Association of Stockbroking Houses of Nigeria (ASHON) and the Central Securities Clearing System (CSCS), on Friday (February 22, 2019) in Lagos, launched a Mutual Fund Trading and Distribution Platform.
The “great landmark,” according to Oscar Onyema, chief executive of the NSE, is the outcome of 18 months of intensive work by the various partners and the Securities and Exchange Commission (SEC).
The platform, the NSE said in a statement, will bring together market participants to facilitate electronic transactions with seamless interaction among the various stakeholders for the good of investors who then have a single view of their mutual fund investment.
Onyema said the platform will enhance visibility for the 76 mutual funds with Net Asset Value of over N600bn as of February 18, 2019, out of which 47 are listed on the NSE, while promoting financial inclusion and stimulating retail investor participation in our market.
“This distribution platform is a new channel for accessing mutual funds which are listed on the NSE. This restates our commitment to provide market operators, issuers, fund managers and investors with a reliable, efficient and an adaptable platform to create a more transparent, liquid and accessible market in line with global best practices.
“The platform will facilitate electronic transactions with seamless connection between NSE, CSCS, Fund Managers and Brokers. Investors have the benefit of a single view of their mutual fund investment while being able to invest with multiple fund managers through a single broker.”
The launch, he continued, provides an opportunity for the 256 brokers in the market to distribute to existing 13.9m investor accounts in CSCS and attract new investors that may be interested in gaining exposure to the capital markets through mutual funds.
The NSE boss expressed hope that with the launch of the initiative, the NSE will receive more applications for listing of mutual funds, even as he announced the listing of two funds each managed by First City Asset Management limited and Cordros Asset Management Limited. The funds are: FCAM Legacy Money Market Fund and Legacy Debt fund; Cordros Milestone Fund 2023 and Milestone Fund 2028 respectively.
The new platform is also expected to ease variety of transactions like subscription, redemption and cancellation, among others.
Speaking on the development, Olumide Bolumole, Head of Listing Business Division, NSE, expressed delight at the initiative, which believes, “will enhance visibility for the listed mutual funds and promote financial inclusion, while stimulating retail investor participation in our market.
“This reinforces our commitment to provide market professionals, issuers, fund managers and investors with a reliable, efficient and an adaptable exchange hub in Africa, to save and to access capital. Through this platform investors can pool funds into chosen basket of securities which have proven to be a veritable means to optimise returns and reduce risks”.
Managing Director and chief executive of the CSCS, Haruna Jalo-Waziri said the trading platform for mutual funds “marks yet another milestone for the Nigerian capital market and we believe that it will serve as a step towards improving the level of financial inclusion in Nigeria by giving investors varieties of investment products.
“As part of our commitment to providing far-reaching benefits to the capital market, CSCS Plc has proactively invested in technology that would enable us provides seamless post-trade services to a wide range of financial instruments including collective investment schemes. Additionally, Fund managers can now augment their product distribution strength using the brokerage communities’ network. We believe this will also contribute towards increasing secondary market participation whilst growing funds under management for Asset managers”, Jalo-Waziri added.
Dayo Obisan, President of FMAN, expressed pleasure at seeing the platform become operational, being “one of the initiatives in the FMAN 5-year road map was to develop and implement a nationwide distribution/trading platform for mutual funds.
“Over the past 18 months, The NSE, CSCS Plc, ASHON and the Securities and Exchange Commission (SEC) worked closely with FMAN to attain this great milestone,” he said.
On his part, Chairman of ASHON, Chief Patrick Ezeagu, noted with delight that the “project was directed at reawakening the small savers to take advantage of investing via mutual fund to have the synergistic benefit of a better return in the market”.
“We cherish the relationship we have built in the course of this project with the FMAN and the NSE, we have the firm belief that this success story will transcend to other areas of the capital market. The Memorandum Trading Platform will facilitate the ease of doing business in trading and distribution of Mutual Funds, it will inspire small savers thereby promoting financial inclusion which is an important focus of our members.”
While congratulating everyone that contributed to the success of this initiative, he encouraged all operators to embrace the innovation aimed at deepening of the Nigerian capital market, being “a formidable incursion into an erstwhile grey sector”.
Photo Caption: From left to right: Efiok Efiok, Head, Investment Management Department, Securities and Exchange Commission, Nigeria (SEC); Oscar Onyema, Chief Executive Officer, The Nigerian Stock Exchange (NSE); Chief Patrick Ezeagu, President, Association of Stockbroking Houses of Nigeria (ASHON); Wale Agbeyangi, Group Managing Director/CEO, Cordros Capital; James Ilori, CEO, First City Asset Management; Dayo Obisan, President, Fund Managers Association of Nigeria (FMAN) at the unveiling on Friday, February 22, 2019.