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Nigeria 2016 | FINANCE | INTERVIEW

TBY talks to Oscar Oyenma, CEO of the Nigerian Stock Exchange (NSE), on the Exchange's advancements in technology, corporate governance and transparency, and revamping market structure.

Oscar Oyenma
BIOGRAPHY
Oscar Onyema was appointed CEO of NSE and member of the National Council in April 2011. Before this, he gained experience for over 20 years in both the United States' financial markets and the Nigerian information technology sector. He is the Chairman of Central Securities Clearing System (CSCS) PLC, Council Member of the Chartered Institute of Stockbrokers of Nigeria (CIS), President of the African Securities Exchanges Association, and a Global Agenda Council member of the World Economic Forum. He also serves on the boards of all subsidiaries of The Exchange, National Pension Commission of Nigeria, and FMDQ OTC PLC. He completed the Advanced Management Program at Harvard Business School, and has an MBA from Baruch College and a BSc from Obafemi Awolowo University, Ile-Ife.

The NSE recently upgraded its equity-trading platform with NASDAQ technology. How has that affected operations at the exchange?

To enhance the investor experience, the NSE launched its X-Gen trading platform in September 2013. X-Gen is based on a number of leading technologies, including the NASDAQ OMX's X-Stream matching engine. It also supports other 21st century technology previously implemented by the exchange, such as a new website equipped with a real-time feed to a ticker and an upgraded virtual private network 20 times faster than the previous offering. Since its launch, X-Gen has demonstrated its innovative trading capabilities and the Nigerian capital market has benefited immensely. We have achieved improved market order flow, increases in the number of trades, high availability, direct market access, remote trading, and income diversification. X-Gen has brought about the advent of mobile and online trading technologies to the Nigerian Capital Market, a feat that could revolutionize market dynamics. Riding on the new platform, most of our dealing member firms have tapped into the benefits to introduce online trading platforms to deepen their businesses.

What is the significance of the recently announced plan to overhaul the NSE to make it easier for foreign investors to access the market?

To achieve our ambitions for market growth and development, the NSE is working on defining industry initiatives that will positively impact the Nigerian capital market, one of which is the revamp of the current market structure. Recently, we launched the Premium Board for companies that adhere to international best practices for corporate governance and meet the Exchange's highest standards of capitalization and liquidity. In a few months, we also plan to institute a Growth Board that aims to support high growth potential companies. In 2014, we signed a contractual agreement with the London Stock Exchange (LSE) to encourage dual listings and promoting each other's markets in a manner that ensures that investors and issuers are fully aware of the investing/listing benefits in both markets. In June 2015, the NSE and LSE held a Dual Listing Conference in London. We also just recently returned from a technical tour of the LSE Group with the purpose of furthering discussions on increasing the depth of the Nigerian capital market.

What progress has been made in recent years to strengthen corporate governance and transparency among Nigerian firms to attract investment?

Diverse investment products, strong regulation, increased transparency, and easy access to the market have ensured increased participation by domestic investors. To be listed is to be in the public spotlight, which connotes transparency, accountability, and integrity—all of which are key elements of corporate governance, integral in attracting both foreign portfolio investment (FPI) and foreign direct investment (FDI). In 2014, we launched the Corporate Governance Rating System (CGRS), which provides assurance for investors by evaluating companies based on the quality of their corporate integrity, corporate compliance with governance rules, and understanding of fiduciary responsibilities by directors and corporate reputation. Currently, CGRS is a key requirement for companies to be admitted into the NSE Premium Board. To facilitate information disclosure, transparency, and accountability in the marketplace, the Exchange also introduced a secure platform, X-Issuer, which allows issuers to electronically submit financial and other relevant information to the market and the Exchange in a seamless fashion. The information provided through the X-Issuer provides a wealth of information that guides investors and intermediaries in investment decisions simultaneously.