SEC Approves NSE Rulebook on Derivatives Market

By Adedapo Adesanya

The Nigerian Stock Exchange (NSE) has revealed that its rulebook on derivatives market has been approved by the Securities and Exchange Commission (SEC). A statement from the agency said this authorisation was received on Monday, August 19, 2019.

Revealing the timeline of action, the stock exchange body said the draft rules were presented to the Rules and Adjudication Committee of Council at the RAC meeting of November 10, 2017, and approved for exposure to stakeholders for comments.

The NSE added that the draft rules were exposed for stakeholders’ comments from December 2017 to January 2018, after which RAC considered the draft rules, and stakeholders’ comments in February, and approved the draft rules for submission to the National Council of the Exchange.

The council approved the draft rules on March 28, 2018 for submission to SEC and made the submission on April 10, 2018.

The NSE said the rules were put in place to promote and maintain at all times the integrity of the market managed by it, as well as to ensure that the business carried out by means of the NSE platform was conducted in a fair, just and equitable manner so as to afford proper protection of investors.

It added that the rulebook would be binding on members in their relationship with the Exchange, between members in relation to the business and as members of the Exchange with the general public.

Part of the rules stated that all transactions on the Exchange derivatives market would be put to effect automatically on the order book or through the Exchange derivatives trade reporting system.

The NSE, in its rulebook, demanded the provision of accurate information in a timely manner about the member business and trades in a format, electronic or otherwise and the provision of all information in English.

The rulebook stated that the NSE was licensed to bring disciplinary action against a former member pursuant to Rule 3.11.4 of this derivatives rulebook.

It also said members in the derivatives market should ensure strict compliance with the rules, adding that where the Exchange believed there had been a breach of the derivatives rules by a member, it might commence disciplinary action against such member in accordance with the disciplinary procedure of the Exchange.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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