The Effect of Automated Trading System on the operation of the Nigerian Stock Exchange (NSE)

The capital market is divided into primary and secondary market. The primary market provides the vehicle for government and corporate entities to raise fresh capital through the issuance of securities while the secondary market enables investors to trade in securities which had been earlier issued in the primary market. Thus, the market provides a mechanism which enables investors to buy or sell existing securities.

The Nigerian Capital Market was established in 1961 to provide and sustain the capital requirements of the Nigerian economy. The mechanism for mobilizing long term funds for investment purposes is the Nigerian Stock Exchange. Between 1961 and 1997, the stock exchange  operated a manual call over system with its inherent problems, which could be summarized as undue delays, high risks and manipulations due to long transaction cycles, minimal transparency and therefore a general lack of confidence in the system (NSE,  2008).

Information and communication technology (ICT) transformation in the Nigerian Capital Market Began in 1997 with the establishment of the Automated trading System (ATS).