Technological Advancements in Nigerian Stocks Trading
Technological Advancements in Nigerian Stocks Trading
Over the years, information technology has been one of the fastest growing factor in Nigeria. It has affected every sector of the Nigerian economy. Easier communication, security, online education, etc. The financial sector has equally not been left out. Only banks now perform online and real time banking. This great innovation equally spread to the Nigerian stock market. The Central Securities Clearing System Limited, the depository of the Nigerian capital market equally embraced this wonderful trend. In early days of 2005, they introduced a digital storage system where all the transactions being carried out in the trading floors of the Nigerian stock exchange are stored. This greatly affected the process of stock trading in Nigeria positively. The introduction of information technology has made it easier to sell stocks, buy stocks, track stocks, and most especially reduce fraud. When an investor gets registered with the stock alert platform, he gets a better control of his equities. No part of his equity can be sold without his knowledge. Since he will be alerted through a text message whenever this happens, making him know if it was authorized, whether in part or in whole. The central securities clearing systems Nigeria launched its digital data storage and retrieval depository which kicked off with the signing of agreement on the project by their representatives and those of IBM, CISCO System, Sunnet System and Datacom Services Ltd, Power System Ltd and Sitech Nigeria Ltd on January 19, 2005.
The solution revolves around Content Management and Data Warehousing Solution called Enterprise Content Management Solution. The Technology is being deployed to capture, store, search and deliver both structured and unstructured data.
The system has put CSCS Ltd at the cutting edge of modern technology in its bit to expand and modernize its clearing, settlement, custody service and other Central Depository function making it a world class center through its multiple communication channels while providing additional services which include the following:
Archiving and Retrieval of digital data center for corporate organization and provide reliable storage for National Data.
Effective disaster recovery offsite data center for organizations such as oil and gas companies, government, banks conglomerates that run Mission-Critical Applications. It will be designed to accommodate small and large corporate bodies.
National Depository and Custody Services for various Information Media which cuts across government, public, corporate, private and individuals.
Another encouraging technological innovation is the Automated Trading System.
Automation of The Trading System (ATS)
Automated Trading System (ATS) is electronic trading in shares through computers by stockbrokers on the trading floor of The NSE.
The ATS is tightly coupled with the CSCS Computer system and makes over-trading in stocks impossible.
The ATS is faster, enhance transparency and removes human moderation of trades and therefore makes appropriate price discovery possible.
Stockbroking firms now migrate to their offices and trade through remote control.
With the Trade Guarantee Fund (TGF) and the Automated Trading System (ATS) tightly coupled with CSCS computer, there is no more cancellation of trades.
Thus, the maxim “my word is my bond” in the market is not only apparent but real.
With this wonderful depository technology in place added to the automated trading systems already in existence, all an investor needs is a clearing house number (CHN), and he gets to be part of this 21st century way of trading stocks.
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