NSE CANCELS BOND TRADING FEES

The Nigerian stock exchange (NSE) has decided to stop charging of trading fees on all fixed income securities (bonds) quoted on the market.

According to a notice on its website dated August 11, this is part of a broader decision to revise charges on the same type of securities  with effect from August 17, 2016.

Also as part of the revision, there will be no more fixed brokerage commissions. This means that  stockbrokers and their customers are now to negotiate same within a maximum of 1%.

Listing fees have also been adjusted from fixed 0.15% hitherto for all bond types, to slightly different rates for three bond types.

Corporate bonds exclusively listed on the exchange with existing equity listing will now attract 0.01% as listing fees.

On the other hand, corporate bonds with dual listing and existing equity will attract 0.0375% just like for other corporate bonds without equity listing.

In the case of state bonds the new listing fees will be at 0.05%.

However, from August 17, the revised rates will run for an initial period of six months and will be reviewed depending how far it achieves its intended objective.

Mr Haruna Jalo Waziri, executive director, capital markets, explained that the revision was intended to boost market efficiency and of course, impact.

He said: "The aim is to reduce issuers cost of accessing long term capital and to provide investors with diverse investment products at competitive trading fees".

However, annual quotation fees payable remains unchanged and as usual, tied to market capitalisation.

The move will offer good relief to many companies who are now reeling under the weight of foreign currency denominated funds because of the fate of the Naira and indeed, to other companies that would have been otherwise compelled to look outside Nigeria for long term capital.

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