The Association of Securities Dealing Houses of Nigeria (ASHON) has put forth a request for an increase in stockbroking fees, which have remained unchanged at 1.35 percent for several years. The association’s chairman, Sam Onukwue, highlighted this issue during the annual general meeting. He articulated the challenges faced by stockbroking firms, particularly due to stagnant fees that have not adjusted in accordance with rising inflation rates. Recognizing the need for regulatory support, ASHON aims to work closely with capital market regulators to not only address the static fees but also to explore the reintroduction of margin trading, which had been suspended in the past.
Margin trading, according to Onukwue, is vital for enabling stockbroking firms to enhance their liquidity and seize opportunities within the financial market. The suspension of margin trading was primarily due to past abuses, which resulted in a cautious stance from regulators. Onukwue emphasized that the fixed fee structure over the years has limited income opportunities for stockbrokers, inhibiting their growth and function in an increasingly dynamic market environment. ASHON has communicated formally with the Securities and Exchange Commission (SEC), requesting an upward review for the fee structure, proposing both a floor and a ceiling for these charges, along with addressing various concerns related to stockbroking revenue.
The regulatory landscape surrounding margin trading requires an update, particularly regarding issues like the exclusion of banking stocks from permissible trading activities. This re-evaluation of trading rules has garnered attention, especially in light of recommendations from the Central Bank of Nigeria (CBN). ASHON is advocating for these changes not only to improve the financial viability of stockbroking firms but also to enhance overall market participation and efficiency. With the Nigerian Exchange Group’s (NGX) announcement regarding its capital-raising initiative through rights offering, the association has taken steps to engage with the board concerning claims reserve shares, aiming to ensure that members are kept informed about developments.
In addition to addressing these critical financial issues, ASHON has been working on strengthening ties with the Institute of Capital Market Registrars to facilitate better interactions and operations for its members. Onukwue noted that these efforts have been successful in resolving operational challenges, ensuring a more seamless collaboration between stockbrokers and registrars. The association continues to make strides despite the challenges it faces, demonstrating resilience and a commitment to the growth and sustainability of the stockbroking profession.
Unity among ASHON members and collaboration with key stakeholders in the capital market has been crucial for the association’s progress. Onukwue expressed gratitude to the governing council, committees, and all supportive members for their dedication and selfless service throughout the year. The association aims to maintain a strong sense of community, recognizing that collective efforts are essential for navigating the complexities of the financial markets in Nigeria.
Looking ahead, ASHON is optimistic about the future of its members and the capital market as a whole. The association is keen on fostering robust relationships with all stakeholders and is dedicated to maintaining an open and productive dialogue with trade groups, exchanges, and regulatory bodies. Onukwue’s vision emphasizes a clearer path forward that not only benefits stockbrokers but also enhances the overall integrity and functionality of the Nigerian capital market in the years to come.
