The Nigerian Stock Exchange (NSE), on Tuesday, February 4, 2020, hosted a workshop on the legal and regulatory requirements of Derivatives trading for capital market operators.
The workshop was organized in collaboration with the Securities and Exchange Commission (SEC) to guide market participants on the proper interpretation of the approved Exchange Traded Derivative Rules.
According to a statement, the workshop is also to enhance understanding of the SEC’s Derivatives and Clearing Rules, besides addressing concerns over the on-boarding process.
Introduction of Exchange Trade Derivatives, Oscar Onyema, Chief Executive Officer of the NSE, said “is aimed at broadening the options available to support efficient implementation of risk management and investment strategies across diverse asset classes and financial instruments. We are, therefore, delighted to host this event in recognition of the importance of capacity building and investor education to the development of this asset class.
“We are working tirelessly to ensure that our Derivatives market aligns with International Organization of Securities Commission (IOSCO) principles by facilitating access to recognized and licensed derivatives products, world-class market surveillance technology, effective trading rules as well as appropriate risk management and clearing facilities.”
Speaking on the rules guiding the Derivatives market, the Acting Director-General, SEC, Ms. Mary Uduk, represented by Head of Department, Registration, Exchanges, Market Infrastructure & Innovation, Emomotimi Agama, said, “the NSE and SEC have provided the platform and requisite rules to guide activities in the Derivatives market.
“It is, therefore, the responsibility of capital market operators to work with us to galvanize activities within this market segment. Furthermore, interested dealing members or clearinghouses must build strong capacity to deliver on investor education, proper legal frameworks, effective risk management procedures, and advanced reporting standards to engage in Derivatives Trading for the safety & security of investors.”
Providing guidance on the legal framework guiding derivatives trading, Michael Dugeri, Senior Associate at Austen Peters emphasized the importance of market integrity, financial integrity, and investors’ protection.
As part of its commitment to building required infrastructures for the derivatives market in Nigeria, the NSE also announced a partnership with Central Securities Clearing System Plc (CSCS) to launch NG Clear, a world-class central clearing counterparty (CCP) entity. The establishment of this CCP entity meets EMIR standards in Nigeria and is in line with the G20 programme to reform global financial regulation.
Photo caption: From left, DR. Timi Austen- Peters – Principal Partner Austen-Peters & Co; Oscar Onyema, Chief Executive Officer, The Nigerian Stock Exchange (NSE); Emomotimi Agama – Head Registration and Exchanges Securities and Exchange Commission (SEC) Nigeria; Oluwatoyin Alake, Head, Secondary Markets, NSE and Jude Chiemeka, Head, Trading Business Division, NSE during the NSE, Train Capital Market Operators on Legal and Regulatory Requirements for the Derivate Market at the Exchange on Tuesday, February 4, 2020, in Lagos.