Nigeria will soon develop a system that will enable the buying and receiving of shares through electronic podiums and electronic devices like Unstructured Supplementary Service Data (USSD).
According to reports, the electronic offering will be done on a platform purposely established by an eligible service provider registered with SEC.
This would eradicate the process of form filling – The implication of this is that there will be an end to the manual-intensive, paper-based process of issuing and buying shares.
The e-O platform will translate the current paper-based process of securities offerings into electronic form through electronic display of offer documents, subscription and payment through a combination of web portals, mobile applications, USSD and other electronic means.
Stakeholders have approved of this – Market regulators, operators and other stakeholders have approved the change, and are currently inspecting a draft framework for the application of the new automated electronic issuance scheme.
The framework was examined at a meeting of the Capital Market Committee, CMC, which was held in Lagos on Thursday.
The CMC also approved the move – The largest consultative assembly of the capital market, the CMC has also consented to this transition.
Implications of this change
The Acting Director-General of the Securities and Exchange Commission, SEC, Ms Mary Uduk, said the automated system will improve issuance processes and encourage more investor participation in the market.
The CMC has been working towards this change for a while – The CMC had earlier this year set up a roadmap committee to come up with a guide for the capital market.
Just a few months ago, the Acting Director General of SEC, Ms Mary Uduk, said the following:
“We know that technology is driving a lot of things in the financial system at the moment. For instance, in the banking system, technology is driving the payment system. Even with phones, people can buy, make payments and even obtain loans, among others.
“We have seen that there is a lot of innovation and cost reduction in the money market due to technology, and so we also want to do the same in the capital market.”