Stockbrokers have urged the Nigerian Stock Exchange (NSE) to reconsider its decision to impose fees on brokers and other professional users and distributors of the Exchange’s data in the interest of the development of the capital market.
But NSE defended its action, saying the proposed fee is the normal practice for global stock exchanges.
President, Chartered Institute of Stockbrokers (CIS), Mr Ariyo Olushekun, who spoke on behalf of his colleagues, said the proposed fees was counter-productive to efforts by brokers and other operators to improve investors’ education and widen awareness and participation in the Nigerian capital market.
He outlined that the NSE needs to reconsider the decision against the background of several reasons including the nascent nature and low level of participation in the Nigerian capital market, the nature of operations of stockbrokers, which thrive on investors’ education, the primary and basic nature of these data and the public availability of such data.
According to him, with less than five per cent of Nigeria’s estimated 170 million population participating in the capital market, there is need to encourage massive information dissemination rather than restricting dissemination of even basic data such as price and trading data.
He noted that the information the NSE wanted to charge for are basic public information, which newspapers give out, pointing out that if the data licensing policy was based on specialised services such as live streaming of data and linking of website to NSE’s website, it would have been understandable.
“The move is counter-productive, people need information; basic information about share prices and transactions. Why do we want to blackout ourselves? The NSE should encourage brokers to give out these figures to encourage investors rather than impeding flow of information,” Olushekun said.
The CIS chief pointed out that the NSE is the main beneficiary of the information dissemination and marketing efforts of brokers as the Exchange has specific charges on all transactions, which brokers had incurred to initiate, market and conclude their transactions.
He said that operators and regulators should avoid bickering that could undermine the recovery of the market, urging all stakeholders to work together to support the development of the market.
“This move will drive investors away from the market. What has happened since the announcement of this licensing policy is that brokers have stopped sending market reports to investors. We are urging them to rescind this decision,” Olushekun said.
He reiterated the supports of stockbrokers as the main body of operators in the stock market for all genuine efforts to develop the capital market.
Meanwhile, the Exchange has said that the proposed fee would be used 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.
The NSE stated that market data sales account for a sizeable portion of the income of many global Exchanges. It said: “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. We have also taken steps to ensure that the retail end of the market can continue to access some of the key market data information at no cost via our web and electronic mail services using the above links.”
The Exchange, in a statement by its management reassured the investing community and wider market stakeholders of its commitment to the provision of quality and timely market data access to them and will continue to take steps to ensure that this commitment is maintained at all times.
It noted that its market dada is a strong proponent of prolific data access, accurate and timely dissemination to the investing community and wider stakeholders of the market. Besides, the NSE said its data facilitates market transparency, better investment decision making and improved access to the capital market.
The NSE pointed out that in the light of its commitment to timely information; it had initiated several initiatives to provide free access to data for the market stakeholders including provision of a near real-time ticker on its website and provision of a number of end of day and historical data on the Exchange’s website.
“In order to further the objectives of providing a quality and timely market data dissemination service, the Exchange took direct control of its Market Data business in October 2012 from EDS and some of our market data vendors, which include reputable global market data distributors such as Reuters, Bloomberg, SIX Telekurs, DirectFN, Interactive Data and I-NET Bridge, it noted.
All these initiatives according to the Exchange, have improved service levels.
For the professional end of the market, index creators and data distributors, the norm is according to the Exchange is for them to pay for data access and any subsequent distribution to support their professional use. Data distributors it explained, cover any organisation (including broker/dealer firms) receiving The Exchange’s data and forwarding these to other market stakeholders for both professional and non-professional use.
