Online trading systems in commercial banks and stockbrokerage firms will soon be integrated to facilitate online trading transactions at the Nairobi Stock Exchange (NSE).

There is an attempt to integrate systems of both investment and commercial banks to facilitate the speedy settlement of accounts once a client places an order, said Peterson Mwangi, CEO of Afrika Investment Bank, during the company's official launch Tuesday.

"At the same time, the process of integrating the Central Depository System and commercial banks' systems is in progress," Mwangi said. "Online trading will reduce the reliance on cash, reduce settlement risk and enhance confidence in the finance sector."

The NSE received several complaints regarding Safaricom's IPO (initial public offering) due to long queues for purchasing and the tedious process of refunding those who did not get full allocation in the IPO.

Stockbrokers at the NSE are now using an automated trading system, which enables them to trade from their offices rather than requiring them to be physically on the NSE floor, with a white board and marker, as was the case a year ago.

Once the integration is complete, Mwangi said that the Capital Markets Authority and the Central Bank of Kenya will offer regulatory supervision.

"The government is working closely with market intermediaries as they automate their back office operations to ensure strong financial sector fundamentals," said Kenyan Vice President Kalonzo Musyoka at the Afrika Investment Bank launch. "The government will also facilitate the NSE to become an effective self-regulatory organization."

The IDG News Service is a Network World affiliate.