Nigerian stock exchange to buy Nasdaq market surveillance platform as stocks plunge persists

The Nigerian Stock Exchange (NSE) plans to acquire a price monitoring system from Nasdaq to protect against market manipulation, including spoofing and layering.

Nasdaq’s SMARTS Market Surveillance platform will provide NSE with the surveillance expertise needed to grow and expand the market. The bourse also also uses Nasdaq’s X-Stream trading platform as its trading engine.

“This development affirms our continuous commitment to protecting investors by creating a fair and orderly market,” said Tinuade Awe, General Counsel and Head of Regulation at the NSE.

“As we introduce new asset classes to grow our market, the deployment of a robust, integrated and efficient solution to monitor the increasing complexity of trading activities is imperative,” he added.

According to Awe, the NSE will focus primarily on regulatory and compliance issues as it works towards becoming Africa’s foremost securities exchange.

With over 20 years of experience, SMARTS is the industry benchmark for real-time and T+1 surveillance, supervision and compliance, a statement by the NSE notes. SMARTS Market Surveillance is currently used by over 52 exchanges and regulators to power market integrity on a global stage.

“We are thrilled to partner with an innovative forward looking exchange such as NSE,” said Tony Sio, Head of SMARTS Market Surveillance, Nasdaq.

He acknowledged the growth potential of the NSE, noting, however, that this growth exposes the bourse to more manipulative practices. Hence, the need for the new technology which can detect activities such as spoofing and layering as soon as they occur. By buying nasdaq’s SMARTS, Sio notes that the NSE is sending a strong message to the market about how seriously it is in promoting a fair market.”

The bourse is at its lowest level since July 2012. All Share Index fell 2.09 percent to 23,333.34 by the close of trading in Lagos on Wednesday while the MSCI Emerging Markets Index rose 1.08 percent. Analysts have attributed the poor performance of the bourse to low oil prices and uncertainties on foreign exchange. While the central bank has maintained that it would not devalue the naira, investors are still skeptical about pouring money back into the country, with the parallel market believed to show the true value of the naira exchanging the currency at 304 to a dollar on Thursday. However, the NSE would hope its commitment to creating a fair and orderly market, shown by the SMARTS purchase, would increase investor confidence.