NSE to set order handling and best execution rules for stock dealing members

The Nigerian Stock Exchange (NSE) is set to make amendments to the Rulebook of The Exchange, 2015 known as (Rulebook) (Dealing Members’ Rules) in its attempts to ensure that Dealing Members strive to obtain the best deal for clients when executing clients’ orders.

In a statement made available to journalists and signed by Tinuade Awe who doubles as the General Counsel and Head of Regulation, the Exchange says it has been observed that some Dealing Members either do not have effective Best Execution policies, or do not follow the principles outlined in their Best Execution Policy when handling clients’ transactions, hence the need to develop the Order Handling and Best Execution Rules.

The text reads in part, “Specifically, the Rules address and provide for best execution principles and criteria, the role of price, Dealing Members’ obligations with regard to the execution of clients’ orders, following clients’ specific instructions, clients’ order handling, aggregation and allocation of orders, aggregation and allocation of clients’ transactions with Dealing Member’s proprietary account, audit trail requirements, and sanctions in the event of default.

The NSE noted that the rules will guide Dealing Members on their obligations, from the receipt of clients’ mandates till when the mandates are executed.

The Exchange also invited stakeholders in the Capital Market to  participate in its rule making process, noting that it is involving as many stakeholders as possible in the rule making process in order to achieve the aforementioned goals. They assured the stakeholders that their contributions will be considered in arriving at the final text of the Rules. stakeholders are to make contributions via the link below:

http://www.nse.com.ng/regulation-site/Dealing%20Members%20Rules/Order%20Handling%20and%20Best%20Execution%20Rules%20-13%20October%202016.pdf

The statement explained that the views of the public on the proposed rules is sought to create public awareness and solicit the public’s feedback on the draft Rules; and also, to improve the quality of the Rules and thereby have a robust, well written set of Rules.

Contributions are expected to be submitted not later than the close of business on Monday, 14 November 2016. Comments should be set forth in a WORD document attached to an electronic mail to Mr. Oluwatoyin Adenugba of the Rules and Interpretation Department of The Exchange via: [email protected].

The statement aptly stressed that the draft Rules are subject to the approval of the National Council of The Exchange and the Securities and Exchange Commission.

All Dealing members of The Nigerian Stock Exchange (NSE) are governed by the Rules and Regulations Governing Dealing Members and compliance to the rules are paramount.