OTC Market: NASD Signs Pact with CSCS, Clearing Banks

The NASD Limited will today sign an agreement with Central Securities Clearing System (CSCS), which is its clearing house and the settlement banks preparatory to the commencement of operations in July.

The NASD is approved by the Securities and Exchange Commission (SEC) to operate an over-the-counter (OTC) in Nigeria, which investors in unlisted companies can trade their securities.
It was expected that the firm would go last month but had to shift the date as it awaits the approval of its updated set of rules by SEC.  As a result, the company will go live in July.

THISDAY checks revealed that as part of preparations for the commencement of trading, NASD Limited will today in Lagos sign agreement with CSCS and the banks that will settle trades on the platform.

The banks are Guaranty Trust Bank Plc, Access Bank Plc, and United Bank for Africa Plc and Sterling Bank Plc.

Directors of CSCS and The NASD will be signing the agreement today for the CSCS to act as clearing and depository for NASD trades. Also, there will be another signing ceremony with directors of the four settlement banks that will enable the banks settle  trades when operations begin next month,” a source close to the company said.

The NASD has generated a lot of excitement in the market already in the capital market.

The Managing Director of the company, Mr. Bola Ajomale, had told THISDAY that the excitement in the market is great because the NASD platform will complement the activities of the NSE and make the capital market for robust and attractive.

Ajomale had disclosed that 10  companies had indicated interest to have their shares traded on the NASD Limited , saying  directors and  shareholders of unlisted companies were very excited to trade their shares on the platform.

“Although we do not require the permission of the companies for their shares to be traded, 10 companies have already indicated they do not mind their shares being traded on the platform” he said.

According to him, there are younger companies that are interested in the market but don’t have access.

He noted  that there is a market for them in this OTC market.
“Remember this market is not a listing market. You just come, do your deal and move on. We are seeing about N400 billion in capitalisation from these 200 companies. These PLCs that you see all over the places, they are potentially tradable. The market will catch on very quickly. Though there would be a lot of sells pressure (share swaps). This will also herald right pricing.  Our vision is to be open to everybody across the world. We will have a platform that is user-friendly. We have reached the final arrangement with the NSE. We are going to be leasing part of their trading platform,” he said.

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