Capital Market Stakeholders Unveil Nigeria’s First Central Counterparty

Caption: From left,  Haruna Jalo-Waziri, Chief Executive Officer, Central Securities Clearing System Plc; Oscar Onyema, Chairman, NG Clearing Limited; Otunba Abimbola Ogunbanjo, Group Chairman, Nigerian Exchange Group Plc; Tapas Das, Managing Director/CEO, NG Clearing; Honourable Babangida Ibrahim, Chairman, House Committee on Capital Market;  Temi Popoola CFA, Chief Executive Officer, Nigerian Exchange Limited and Ms. Tinuade Awe, Chief Executive Officer, NGX Regulation Limited at the launch of NG Clearing Limited, the first Central Counterparty (CCP) in West Africa, on Thursday, December 9, 2021, in Lagos.

The Nigerian Capital Market witnessed a milestone formal launch of NG Clearing Limited, West Africa’s first Central Counterparty, making it possible to deal in exchange-traded derivatives.

NG Clearing will facilitate the clearing and settlement of exchange-traded derivatives, manage counterparty risk, reduce systemic risk, and promote the safety and integrity of Nigeria’s capital market, thereby offering new and clear opportunities for investors, stakeholders, and other players in Nigeria’s capital market. 

The hybrid event had a mix of high-profile physical and virtual participants, attracting personalities as the Secretary to the Government of the Federation, Boss Mustapha, represented by Paul Kanu; the Lagos State Governor was also represented by Mrs. Alake Sanusi. The National Assembly was represented by Honorable Babangida Ibrahim, Chairman, House Committee on Capital Markets.  

Welcome participants, the Managing Director and Chief Executive Officer of NG Clearing Limited, Tapas Das, stressed the significance of the launch, linking the emergence of NG Clearing to the maturity of the Nigerian financial ecosystem.

“With Nigeria’s capital market maturing into offering advanced capital market products such as futures derivatives, it is only ideal to establish a CCP, in line with global best practices. The emergence of NG Clearing is not only an indication of our collective growth as a market but also a marker of the forward-looking intent of the Nigerian capital market,” he stressed.  

He also assured of the company’s vision and depth of capacity in place to ensure it delivers on its vision “to become Africa’s most trusted CCP. With this vision in mind, we have left no stone unturned in ensuring that we offer world-class infrastructure, transparent and resilient processes, with an experienced team of worthy professionals.” 

Also speaking, Oscar Onyema, the chairman of NG Clearing chronicled the origin of the NG Clearing dream in his address.

The company, he said “was borne out of a firm commitment to position the Nigerian capital market as a stable and resilient market that offers local and foreign investors sound opportunities without compromising global standards. On this premise, we took steps to identify the gaps that inhibit our market from attaining this positioning. One of the gaps we identified was the absence of the financial market infrastructure known as a CCP.” He also noted that having a CCP is key to the realization of the Nigerian Capital Market master plan. 

The Finance Minister, Mrs. Zainab Shamsuna Ahmed expressed confidence that the NG Clearing’s emergence will contribute to the post-covid-19 recovery of the Nigerian Economy, besides opening “a door of new possibilities… for growth and development of the Nigerian economy”.

Concurring, Otunba Adeniyi stressed that “NG Clearing emergence redefines Nigeria’s financial landscape, creating endless possibilities for products that can be developed and deployed”.  

On his part, the SEC DG asserted that the launch of NG Clearing as a CCP is historic for the Nigerian Capital Market, as it “will help in deepening the market while placing it on the right path to achieving the required sophistication, depth, and breadth in terms of products and service offerings.”

The commission, he assured, will continue to deliver on its mandate of ensuring the Nigerian capital market is safe, orderly, and built on integrity, just as the CBN Deputy Governor, detailed the important roles of NG Clearing in driving stability in the ecosystem. She also stressed the need to adopt sustainable approaches that contribute to the combating of climate change.  

There was a virtual session on how NG Clearing as a CCP will contribute to the resilience of Nigeria’s Financial System with panelists such as Teo Floor, CEO of CCP12 (the Global Association of Central Counterparties), Alicia Greenwood, CEO of JSE Clear (South Africa), Narendra Ahlawat, CEO of Multi Commodity Exchange Clearing Corporation (MCXCCL, India), Uche Orji, CEO of the Nigeria Sovereign Investment Authority (NSIA), and Ayodeji Balogun, CEO of AFEX Commodities.  

NG Clear was incorporated in 2016 and received the Securities and Exchange Commission’s nod to begin operations in June 2021, the launch of NG clearing culminates a long journey towards the creation of a world-class- post-trade services provider with a focus on advanced capital market offerings.  Also, the event was joined virtually by the Edo State Governor, Godwin Obaseki; Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed; her Trade, Industry and Investment counterpart, Otunba Adebayo Adeniyi; Director-General of the Securities & Exchange Commission (SEC), Lamido Yuguda; Deputy Governor, Financial Systems Stability Directorate, Mrs. Aisha Ahmad; and Tony Elumelu, the Chairman of Heirs Holdings; all of who made special remarks.