Worried by the effects of high cost of doing business on the earnings of its members, Association of Securities Dealing Houses of Nigeria (ASHON) is seeking an upward review of the stockbroking fees which it describes as static over the years.
At the moment, stockbroking fee has remained at a ceiling of 1.35 percent over the years, despite the soaring rate of inflation and other annual regulatory charges that ASHON members pay. Besides, the suspension of margin trading due to abuse has crippled access to liquidity for many stockbroking firms, making it difficult for them to take advantage of emerging opportunities in the market.
Addressing the members during the Annual General Meeting (AGM) in Lagos at the weekend, ASHON’s Chairman, Sam Onukwue, explained that the association is working closely with the capital market regulators to address the issue of static stockbroking fees and the need to re-introduce margin trading for mutual benefits of stockbroking firms and the stock market.
“The fees chargeable for stockbroking transactions have remained static for many years, despite the continuous rise in inflation rate. The stockbroker’s income is limited to a ceiling of 1.35 percent for years. The association, after rigorous market research, has written a formal request to the SEC for an upward review of the fees specifying a floor and a ceiling including all other issues around stockbroking income including the use or misuse of vending agreements lately.
“The association has made representations to the regulatory authorities for the reintroduction of margin trading. The issues at stake are the exclusion of banking stocks in the securities to be traded as well as the need to update the rules, which was at the behest of the CBN.
“The association has since the NGX announced its capital raise by way of rights engaged the Board on the status of the two percent claims reserve shares provided for in the scheme of arrangement of the demutualisation. The Exchange has committed to a transparent resolution of the issues before the Rights Offer opens. We will update members accordingly.
“ASHON, in conjunction with the NGX X-Academy, successfully organised a seminar on ‘Market Liquidity: Insights, Challenges and Solutions.’ Based on the success of that seminar, we intend to continue to collaborate with key market infrastructure in creating opportunities for our members to upskill their workforce.
“We have strengthened our relationship with the Institute of Capital Market Registrar (ICMR) with a view to creating a seamless interface between our members and registrars. We believe this fosters closer understanding between our members. It has helped to resolve operational issues between our members.
“The association has continued to make progress against all odds. We are determined to survive and our faith will see us through. I greatly appreciate the efforts of members of the Governing Council and committees as well as all our supportive members for your selfless services during the year.
“We appreciate all members of the capital market community, the trade groups, exchanges and the apex regulator; we have had such cordiality in our relationship. We look forward to an exciting future for our members and to a more robust relationship with all stakeholders in years ahead,” said Onukwue.
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