NGX Group to expand primary market issuance with digital innovation

THE Group Managing Director/CEO of Nigerian Exchange Group, Mr. Temi Popoola, has highlighted the Group’s leadership in digital innovation, particularly as banks and other institutions embark on capital-raising exercises.

In a recent live chat on CNBC Africa, Popoola emphasised that this innovation is the result of several years of planning to transform the market into a digitally-driven exchange. He noted that the capital market has operated remotely for nearly three years without interruption, even during the COVID-19 pandemic, thanks to the Exchange’s collaboration with critical stakeholders to streamline primary market issuance processes, especially capital raising.

“Historically, you had to fill out a paper form to transact in securities in the primary market, which came with challenges around dividends,” Popoola explained. “While we haven’t completely eliminated those forms of transactions, we have introduced a digital solution.”

He pointed out that the digital innovation on the Exchange website allows investors to participate in the ongoing rights issue and public offer of three Nigerian banks in just two minutes.

Responding to how this innovation integrates with other platforms, Popoola said, “This functions like an API gateway. Qualified parties, as determined by regulators, can plug into this system. Whether you’re an online broker platform with access to technology, you can request those APIs from the Exchange and integrate smoothly to distribute to all your customers.”

He added, “We’re excited to report that financial institutions raising capital are also using these APIs. This marks a positive period in our capital market’s history, bringing the wider financial community closer to the capital market. Whether you access these banks’ websites or mobile apps, you’ll find it easy to navigate and purchase securities, completing your investment with just a few clicks.”

Popoola further explained that this API gateway is available to anyone licensed and authorized to use it, making it an open system for all qualified parties. However, he clarified that this innovation currently supports only primary market issuances and won’t be expanded to the secondary market due to regulatory limitations.

“The goal is to expand primary market issuance to a broader audience, drawing them into the capital market. Subsequently, these investors can trade, buy more, and be managed by our intermediaries,” Popoola added.

He stated that, in the short term, the Exchange is focused on making the platform robust to support innovative capital-raising exercises.

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