In further support of Phase 1 Sponsored Access, for the West African Capital Market Integration (WACMI) program, the Nigerian Stock Exchange (NSE) has pledged to support Direct Market Access (DMA) as an interim step to the implementation of Sponsored Access.
In Phase 1, brokers in WACMI member countries will now be able to trade securities and settle in markets other than theirs through local brokers in those domestic markets.
The main objective of Phase 1 is to enable brokers that are not registered market operators in Nigeria to participate in the market by granting them remote access to The NSE’s trading facility through a local Dealing Member Firm.
With DMA, a Dealing Member Firm (Sponsoring Member or SM) can allow a Sponsored Participant (SP) to submit orders to the trading system under the member firm’s trading codes via the member firm’s order management systems (OMS). In the next sub-phase, Sponsored Access, unlike DMA, will allow a Sponsored Participant to submit orders under a Dealing Member Firm’s trading codes to the trading system without passing through a member firm’s order management systems; instead their orders pass through a series of validation checks provided by The Exchange and the orders are monitored by the member firm in real-time (i.e. Exchange’s infrastructure).
In order to support WACMI based applications for the DMA program, The Exchange has established a comprehensive internal process to ensure seamless integration. As part of the process Dealing Member Firms who wish to provide DMA services to Sponsored Participants are required to inform The Exchange by submitting a DMA Notification, along with other required information and seek the NSE’s “No Objection” to the DMA arrangement. Any active Dealing Member firm in Nigeria that is registered with the Securities and Exchange Commission (SEC) and licensed by the Nigerian Stock Exchange can apply for Phase 1 under the WACMI program. The Dealing Member firms must have an OMS vendor that is certified by the Exchange for sub-phase 1, DMA.
Additional information on the full process for submission and the associated requirements for the DMA program, along with FAQs can be located under the “[ ]” section on The Exchange’s website at www.nse.com.ng.