APPRAISAL OF THE IMPACT OF THE INNOVATION OF INFORMATION TECHNOLOGY ON THE OPERATION OF THE NIGERIAN CAPITAL MARKET

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The capital market is that arm of the financial market that provide facilities far mobilizing and dealing in medium and long term funds. Its emergence is owed to the development of a market oriented economy which is required as an alternative source of funds to the money market for purposes of findings economic projects. The Nigerian capital market (NCM) first came into existence in 1960 with establishment of the Lagos Stock Exchange but became operational in 1961. The exchange was incorporated under the companies ordinance as in association limited by guarantee. The Lagos Stock Exchange was given inSSitial financial backing by the Central Bank of Nigerian (CBN) in the form of annual subvention. In 1977, following the reconstructed into the Nigerian Stock Additional trading floors were also opened in the same year in Port-Harcourt and Kaduna.
The Nigerian Stock Exchange (NSE) is the centre point of the capital market while the Securities and Exchange Commission (SEC) serves as the apex regulatory body. It provides mechanism for mobilizing private and public savings and makes such funds available for productive purposes. The exchange also provides a mean for trading in existing securities. To enable small as well as large scale enterprises gain access to public listing, the NSE operates the main exchange for relatively large enterprises and the second tier security market (SSN) where listing requirement are less stringent for small and medium scale enterprises. The exchange which started with only 19 securities traded on its floors in 1961, now has 279 securities made up of federal government stocks, 62 corporate bonds and 108 equities all with a total market capitalization to N 170 billion. The origin of the capital market in Nigeria can be traced to the year 1964 when the government floated its first security. This was done informally as there was yet no formal stock exchange.
The instrument or stock in-trade of the capital market in Nigeria are mainly company stock/bonds and units trusts. Under the vision 2010, Nigeria is expected to become the leading industrialized nation in Africa with strong global economic influence. It is therefore expected that the country would achieve a sustained annual Gross Domestic Product (GDP) growth rate of 6.1% and the industrial sector contribution to this would stand at no less than 30%. The manufacture sector is expected to achieve a growth rate of less than 95. To achieve all these economic development and growth objectives, finance definitely will play a key role in the entire process. The Nigerian capital market is therefore expected to play significant roles as a source of funds for economic recovery and growth. In recognition of this fact, government was motivated to provide regulatory framework to protect and develop the market. This role is performed by the Securities and Exchange Commission (SEC). Being the apex regulatory authority in the capital market, the commission ensures orderly, fair and equitable dealing in securities and protects the 'integrity of the securities market against abuse arising from insider trading in line with its main objective of investor protection and market development.
CONCEPTUAL FRAMEWORK  With the introduction of the electronic contributor system, the NSE is able to bean stock market, operations to the outside world via the renters international information network. The' late 1950's further witnessed an upsurge of private industrial investments especially by foreigners who re-investing profit earned from trading activities. Legislation for formalization of a securities market in May 1958 with the setting up of the bareback committee to consider ways and means of fostering a share market in Nigeria. The adoption of the recommendations made by this committee by government led to the legislation of the Lagos Stock Exchange in March 1960 (NSE). Today the NSE has about six branches spread over the country.
THE STRUCTURE OF THE NIGERIA CAPITAL MARKET
There are broadly classification:
1. Primary Market
2. Secondary Market
THE PRIMARY MARKET  This the market in which public companies offer their new shares to the public issues of shares of debentures take three principle forms. Firstly, by right issues and open offer which basically is a situation where the company invites its existing shareholders to subscribe further capital required. Secondly, by placing or selective market this result when a company agrees to allot the whole issue of securities at an agreed price to intermediary merchant bank or corporate finance subsidiary of a commercial bank. Thirdly, by public offers which IS an invitation made to the public generally to subscribe for or purchase securities of a company.
THE SECONDARY MARKET  This is the market in which registered operators trade securities previously issued on the primary market. Examples are:
1. The Stock Exchange - Nigerian Stock Exchange
2.  National Association of Securities dealer (NASO). Still in its formation stage.
3. Over the counter (OTC) market: It is on the market that securities of public companies not quoted on the exchange are marketed. The market is however yet to commence activities in Nigeria. The following are the implication of the innovation of information technology in the Nigerian capital market and they are discussed respectively.
1. Decreased use of manual labour
1. Capital intensive
2. Timely information
3. Revenue for staff training
4. Efficient information system
5. Competition with foreign counterparts
6. Rapid innovation
7. Ability to adapt to technology changes
a. DECREASED USE OF MANUAL LABOUR
With the invention of information technology, transactions and business would no longer involve the use of manual labour unlike before, transactions would be done via computers and the internet thereby leading to increase in unemployment.
b. TIMELY INFORMATION The innovation of information technology in Nigeria capital market would enhance the passage of information positively. Shareholders and other players in the capital market would be able to access information at any time without stress; from anywhere and at any time. Also the use of past offices and other corner services would reduce with the innovation of E-bonus and E-individual.
c. CAPITAL INTENSIVE The innovation of information technology would involve the use of more capital, therefore arises the need to source for finance. The involvement of money would be dominant while manual labour recessive.
d. REVENUE FOR STAFF TRAINING Source there is much reduction of human labour, the little staff employment would have excess funds to be catered with capital market operators would be able to fend for their staff training and staff development. 
e. EFFICIENT INFORMATION SYSTEM The information system in the capital market with the innovation of information technology would be efficient, fast and reliable up to date information would be received on time.
f. COMPETITION WITH FOREIGN COUNTERPARTS With the innovation of information technology in the capital market, the Nigerian capital market would be able to compete with the foreign capital market; also information would be easily passed and accessed.
g. RAPID INNOVATION AND DEVELOPMENT Since information to business is like blood to the body. Other innovations and development aside information technology would automatically occur. There would be lots of changes in the capital market e.g. customers relations, advertising etc.
h. ABILITY TO ADAPT TO TECHNOLOGY CHANGES With the innovation or information technology, it would be no problem for the Nigerian capital market to adapt to coming technology changes.
1.2  STATEMENT OF THE PROBLEM
The statements of problem of this research study are:
1. Extent of which the innovation of information technology Increase the effectiveness in the Nigerian Capital Market.
1. The role of registrars in new issues.
2. The benefits of computerization in share registration
4. The role of registrars in implementing the E-bonus initiative.
1. The key players in the capital market and their functions
2. The basic essentials of computerization.
3. The book of the New' Nigerian Capital Market.
1.3  OBJECTIVES OF STUDY
1. To understand the implications of innovation of information technology on Nigerian Capital Market.
2. To know the extent to which the innovation of information technology affects registrars in Nigeria.
3. To know the level of which computerization as gotten to in the Nigerian Capital Market.
4. To know the role or registrars in new issues
5. To understand the implementation of E-bonus, E-dividend and Certificate.
6. To understand the extend of the relationship between registrars and the Central Securities Clearing System. (CSCS).
1.4   RESEARCH HYPOTHESES
Ho : The innovation of information technology will not significantly affect the capital market
HI : The innovation of information technology will significantly affect the capital market
Ho : The introduction of computerization will reduce the effectiveness of registration.
Hi : The introduction of computerization will not reduce the effectiveness of registrars.
1.5   METHODOLOGY OF STUDY
For this research work, both primary and secondary source of data collection are to be used. The primary source of data collection is the distribution of questionnaires and personal interview with registrar's officials. Also the secondary sources are the materials gotten from the registrars, internet, Securities and Exchange Commission Library (SEC) and other written textbook and also current materials on the issue.
1.6   LIMITATION OF THE STUDY
The following are the limitations to this research work: 1. The unavailability of financial resource to carry out the research work. 1. The inadequacy of information's provided by the respondents is also one of the limitations to this research work. 2. Problem of squeezing time for school work and also research work.
1.7   DEFINITION OF TERMS
a. BROKERS These are dealing members of the exchange who practically do the buying and selling of instruments on behal f of clients. Stockbrokers essentially execute orders on client's instructions on the 1100r of exchange for a commission. This is however a special class of brokers called jobbers who may buy and sell on their own account in the process of achieving reasonable spread on the transactions. It is a risky but highly rewarding business journalism
b. REGISTRARS Typical transactions in the capital market involve a large number of participants requiring specializing handling and processing of records. Registrars handle this simple working but often intricate role in the market. Even with the advents of technology they remain an importantly, they maintain the list of shareholders in a company and the consequential functions relations to adjustment in such holding following subsequent transactions. They also take the responsibility of dispatching dividend warrants, annual reports, notices for bonus issues, annual general meeting etc. to holders of instrument.
c. TRUSTEES Trustees exist as specialized institutions that undertake to monitor and ensure compliance to contractual terms of issues by the key parties. This is particularly the case of debt contracts and investment management relationship.
d. SECURITIES AND EXCHANGE COMMISSION Securities and Exchange Commission derives its power under section 8 of all the investment' and securities Act No. 45 of 1999 to regulate and supervise all activities in the capital market with a view to protect investment and to provide the framework for capital market.
e. ISSUING HOUSES This is the key intermediary licensed by the apex capital market institution to assist issuers in packaging offers in the market. They basically co-ordinate the entire issue process, brings together all the other professionals and either underwrites or arrange for the underwriting of the issue where necessary. They undertake the all important role of pricing the issue and generally advise the issuers on matters relating to the success of the exercise.
f. NIGERIAN STOCK EXCHANGE The Nigerian Stock Exchange (NSE) is the organized primary and secondary securities market in Nigeria. 1t was set up in 1960 as Lagos Stock Exchange and in 1977 the name was changed to Nigerian Stock Exchange. The Nigerian stock exchange is a self-regulatory organization (SRO). In 1990, the exchange changed its legal status to a company limited guarantee but retained three classes of membership namely: Founding members, Ordinary members and Dealing members.