Market Transparency: NGX Works with CSCS and Stakeholders to Reduce Settlement Cycle and Implement STP

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NGX Collaborates with Stakeholders to Reduce Settlement Cycle, Emphasizes Use of STP for Transparency in Nigerian Capital Market

In response to ongoing financial market reforms and global competition among exchanges, the Nigerian Exchange Limited (NGX) announced its commitment to working with the Central Securities Clearing System (CSCS) Plc and other stakeholders to reduce the settlement cycle from T+3 to T+1 in the coming years.

During the virtual NGX Retail Workshop, themed “STP of Equity Transactions,” Jude Chiemeka, the Divisional Head of Capital Markets at NGX, praised CSCS and United Capital for their collaboration. He emphasized the importance of keeping up with evolving trends and technologies in the equities market to provide investors with the best possible service as a platform provider.

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Chiemeka highlighted Straight Through Processing (STP) as an advanced technological tool that automates end-to-end transaction processing and enhances transparency in the Nigerian capital market. He cited successful implementations of STP in other markets, such as India, where the settlement cycle was reduced from 15 days to 2 days. NGX aims to achieve a similar reduction from T+3 to T+1 by leveraging STP and working closely with CSCS and other stakeholders.

Implementing STP brings numerous benefits, including increased market transparency, avoidance of costly manual intervention and duplication of work, reduced risks and errors, faster data processing, and improved market efficiency and trade volume. It also enables effective regulation through systematic audit trails. NGX is committed to exploring advanced technological tools like STP to ensure efficient and seamless transactions for the investing public.

Tobe Nnadozie, the Regional Head of Business Technology and Digital Innovation at CSCS, highlighted the seamless settlement and real-time enterprise Know-Your-Customer (KYC) integration that STP provides. Although STP may be costly initially, it is expected to become more affordable in the long run.

Martha Ehizele, the Digital Channels and Partnerships Lead at United Capital Securities, emphasized how STP can attract more youth to the capital market, particularly those who are not yet investing.

Hari Chaitanya, the Head of Investor Service Product Management, Transactional Products and Services at Standard Bank Group, emphasized that STP enables quick access to a wide range of products, mitigates risks, and reduces operating costs in the market.


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