NSE introduces auction trading system
Nigerian Stock Exchange on Monday deployed a new trading software and introduced an auction system in determining closing prices of stocks.
The software, NASDAQ OMX – X-GEN, is a high performance, robust and scalable, multi-asset, multi-market-model central market system with integrated pre-trade risk management and index engine.
The deployment of the new trading platform is happening simultaneously with the introduction of an auction system to determine closing prices of stocks henceforth.
In note to brokers, the NSE explained that the X-Gen, Fix and Order Management System (OMS)allows straight through flow between the stockbroker firms' Order Management System, the back office settlement system and the NSE trading engine which will allow for real-time updates on execution.
It also said that the introduction of the auction based new market structure follows leading practices used in global Exchanges and further demonstrates the transformation initiatives that are being implemented to re-position the Nigerian Capital Market as the gateway to the African markets.
The key changes under the new market structure are the introduction of Pre-Open Adjust and the Pre-Close Adjust sessions.
These sessions allow market makers to better address any imbalances following the market Pre-Open and Continuous Trading sessions.
The new market structure will be introduced in two phases and will improve liquidity, reduce imbalances and dampen volatility around the open & close auctions. Phase 1 will take effect on 30th September 2013 and the commencement of phase 2 is expected before the end of 2013.
The NSE CEO, Mr Oscar Onyema, said, 'Our market structure is in line with what has been successfully adopted in the leading global exchanges worldwide and we expect to enhance it further before the end of the year to improve the overall liquidity and participation in our equities market'.