NSE soft-pedals on enforcement of data distribution ban

By Babajide Komolafe

The Nigeria Stock Exchange (NSE) has soft-pedaled  on the recent ban on distribution of its data by capital market operators.

Investigation revealed that following widespread complaints by operators and discussions at the Capital Market Committee (CMC) meeting last week, the Exchange decided not to commence the ban to allow time to for proper communication of the new policy on data dissemination.

Two weeks ago, the Exchange directed operators in the Nigerian Capital Market to stop daily distribution of capital market information to clients and investors. The Exchange insisted that capital market operators should pay for such data as it is being done in other stock markets.

Addressing journalists at the end of the CMC meeting on Thursday, Director-General, Securities and Exchange Commission (SEC) said that the ban was discussed at the meeting. She said that while operators expressed concern over the ban, the Exchange explained its rationale for introducing the ban. She said that the position of SEC as apex regulatory body is that a lot of communication works needs to be done to ensure proper understanding among market operators and participants. She said for now, the opinion of the Commission is that there should be time for communication of the policy, adding that the Commission is yet to take a position on the matter, and it would require some time before it can do so.

It would be recalled that last week, Financial Vanguard reported that the ban was a unilateral decision by the management of the Exchange, as Council members expressed surprise at the introduction of the ban. Market operators also said that the Exchange did not consult the broking community, who are actually the owners of the Exchange, on the matted.

Investigation revealed that following the tone of discussion at the CMC meeting, the Council of the Exchange met on Friday, and it was decided that ban should not be enforced for now. Though Council members believe that the new policy of the Exchange is in line with global trend, they were of the opinion that given the discussions about the policy at the CMC meeting and especially the body language of the SEC, it is better to delay enforcement of the ban for now, and allow time for communication and consultation to gain understanding of the brokers community.

In statement signed by the Head Corporate of Communications, NSE, Dante Martins, the management of the Exchange justified its action saying, “It is normal practice for global Stock Exchanges to charge for this type of market data use to cover some of the huge cost incurred in generating, storing and disseminating the data, which incidentally is also a key element of their intellectual property rights. Indeed, market data sales account for a sizeable portion of the income of many global Exchanges. We have however offered a discounted fee for our broker/dealer firms and the domestic professional end of the market to facilitate improved access and priced the service competitively in comparison to other stock exchanges.

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