By Modupe Gbadeyanka
A workshop on the legal and regulatory requirements of derivatives trading for capital market operators was held on Tuesday, February 4, 2020 at the Exchange House in Lagos.
The event was designed to guide market participants to properly interpret the approved exchange traded derivative rules and recently released Securities and Exchange Commission (SEC)’s derivatives and clearing rules, as well as address concerns on the on-boarding process.
It was put together by the Nigerian Stock Exchange (NSE) and SEC, the apex capital market regulatory agency.
Head of Department, Registration, Exchanges, Market Infrastructures and Innovation at SEC, Mr Emomotimi Agama, while speaking at the seminar, stated that, “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 galvanise activities within this market segment.
“Furthermore, interested dealing members or clearing houses 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.”
In providing guidance on the legal framework guiding derivatives trading, the Senior Associate at Austen Peters, Mr Michael Dugeri, emphasised the importance of market integrity, financial integrity and investors’ protection.
On his part, the Chief Executive Officer of NSE, Mr Oscar Onyema, said, “The introduction of exchange- trade derivatives on our bourse 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 remains aligned with International Organization of Securities Commission (IOSCO) principles by facilitating access to recognized and licensed derivative products, world class market surveillance technology, effective trading rules as well as appropriate risk management and clearing facilities.”
As part of its commitment to building required infrastructures for derivatives market in Nigeria, the NSE 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 G20 program to reform global financial regulation.
