Buyers within the international capital markets can count on the launch of West Africa’s first Change Traded Derivatives (ETDs) on The Nigerian Stock Change (NSE or The Change) within the close to time period following the registration of NG Clearing by the Securities and Change Fee (SEC) as a premier Central Counterparty Clearing Home (CCP). The approval-in-principle will enable The Change to launch ETDs supported by NG Clearing within the danger administration course of.
Arrange by key gamers within the Nigerian monetary trade together with NSE, Central Securities Clearing System (CSCS) and top-tiered banks, NG Clearing will play a key function within the monetary market ecosystem by driving the protection and stability of Africa’s international market by way of environment friendly and well timed settlement of spinoff trades. Related to a member exchange of the World Federation of Exchanges (WFE), capital market gamers can count on NG Clearing to align with the best requirements of world greatest practices in delivering clearing and settlement companies.
Talking on the event, the Chief Govt Officer, NSE and Chairman, NG Clearing, Mr. Oscar N. Onyema, OON acknowledged, “Our main role is to improve the safety of our financial market by delivering best-in-class post-trade services that manage counterparty credit risk and reduce systemic risk. To mitigate these credit risks in an efficient and robust manner, we will interpose ourselves as a guarantor to both parties in a transaction, thus ensuring the successful execution of derivatives and other trades from various trade points. We intend to deliver an unparalleled CCP experience for the African financial markets.” Accordingly, the introduction of ETDs on the NSE will deepen Africa’s place within the international monetary markets, in addition to improve liquidity and assist mitigate towards price, period and different monetary dangers that may come up from subtle monetary transactional actions.
The Change, the main securities Change in West Africa with international memberships within the likes of WFE, IOSCO, ISG, will introduce the first set of equity-linked merchandise comparable to index-futures or single-stock futures/choices that meet international monetary structuring requirements permitting international & domestics traders and funding managers to appropriately hedge towards draw back danger. In laying the groundwork to construct a standardized derivatives market, NSE has labored with SEC and the Central Bank of Nigeria (CBN) to ascertain the optimum regulatory and authorized framework for derivatives within the Nigerian capital market. As well as, NSE has partnered with international funding banks, comparable to JPMorgan Chase, to facilitate in-depth capability constructing programme on the derivatives market.
Main as much as the launch of ETDs, the Change will difficulty its first set of buying and selling licenses in over 20 years because it frequently welcomes and onboards buying and selling/clearing members. The NSE will even proceed market-wide capability constructing for international members, together with the lately held digital workshop with the theme, Adopting Derivatives Throughout Burdened Market Situations and the Authorized and Regulatory Necessities of Derivatives Buying and selling for Capital Market.