Economy
SEC Proposes New Rules to Regulate Derivatives Trading
By Dipo Olowookere
The Securities and Exchange Commission (SEC) has proposed new rules to guide the trading of derivatives in the local capital market.
To get all stakeholders involved in the draft of the guidelines, the apex regulatory agency has asked them to send in their inputs.
According to SEC, these proposed changes affect derivatives trading and registration requirements for commodity brokers.
It disclosed that the rules will apply to Exchange Traded Derivatives and OTC Derivatives, pointing out that an application for registration of a contract shall be filed with the commission by or on behalf of an exchange with some documents, including SEC Form, Name of the Contract, Type of Contract, Listing Day, Expiry Day and others.
SEC further proposed that the contract must pass an economic test that will be determined by the Commission from time to time.
Under the proposed new rules, no participant or any capital market operator shall trade in Exchange Traded Derivatives without the prior registration by the Commission.
“Funds shall only invest in derivatives if it is expressly stated in their Trust Deeds.
“Where an underlying security is suspended from trading or delisted, contracts on such underlying shall cease to trade.
“Exchange Traded Derivatives can only be traded on Exchanges recognized by the Commission,” the agency said.
It further disclosed that, “All Exchange Traded Derivatives Contracts shall be cleared by a recognized CCP.
“All standardized OTC Derivatives Contracts shall be cleared by a recognized CCP
“The Commission shall issue guidelines on standardized OTC Derivatives Contracts from time to time.
“Clearing derivatives shall be in line with the the provisions of the Act, SEC Rules and Regulations, and the rules of the relevant CCP.
“Where physical delivery is required, the Exchange and/or the CCP shall make adequate arrangement for such delivery and ensure compliance with specification.
“The arrangements referred to in number 5 above shall include place, time, quantity and quality and any other specifications as contained in the contract.”
SEC also said no persons shall trade on Exchange Traded Derivatives either for proprietary accounts or on behalf of clients except entities registered as Derivatives Trading Members and/or Derivatives Clearing Members.
In addition, “No persons shall clear Exchange Traded Derivatives or OTC Derivatives except entities registered as Derivatives Clearing Members.
“Participants shall promptly provide complete and accurate information about clients and their trading activities to the Commission as the need arises in accordance with the Act and SEC Rules and Regulations.
“Participants shall comply with all relevant provisions of the Act and SEC Rules and Regulations, whether or not expressly stated in these regulations.”
The agency said those who want to comment on the proposed new rules should forward them to the Secretariat, Rules Committee of the Commission via rulescommittee@sec.gov.ng or through the Ag. DG, SEC, not later than two (2) weeks from the date of this post.
View the full draft below
http://sec.gov.ng/proposed-new-rule-and-sundry-amendments-to-the-rules-and-regulations/
By Adedapo Adesanya
Price appreciation recorded by three securities raised the NASD Over-the-Counter (OTC) Securities Exchange by 0.84 per cent on Thursday, May 8.
FrieslandCampina Wamco Nigeria Plc appreciated by N2.20 to close at N41.03 per share compared with the preceding day’s value of N38.83 per share, Central Securities Clearing System (CSCS) Plc exchanged by N2.17 to trade at N23.88 per unit versus N21.71 per unit, and Afriland Properties Plc added N1.07 to settle at N17.45 per share, in contrast to Wednesday’s price of N16.38 per share.
On the flip side, the price of Geo-Fluids Plc went down by 8 Kobo to end at N1.92 per unit compared with the N2.00 per unit it was traded at midweek.
At the close of transactions, the market capitalisation of the trading platform went up by N16.27 billion to N1.944 trillion from N1.927 trillion and the NASD Unlisted Security Index (NSI) rose by 27.80 points to 3,320.16 points from the previous session’s 3,292.36 points.
During the trading session, there was a 58,260.6 per cent surge in the volume of securities transacted in the session to 346.3 million units from the 593,373 units transacted in the previous trading day.
Equally, there was a 4,832.3 per cent rise in the value of securities traded during the trading day to N882.8 million from N17.9 million, but the number of deals dropped 40.7 per cent to 16 deals from 27 deals previously recorded on Wednesday.
Impresit Bakolori Plc finished the day as the most active stock by volume on a year-to-date basis with 533.9 million units worth N520.9 million, followed by Geo-Fluids Plc with 265.8 million units valued at N469.5 million, and Okitipupa Plc with 153.6 million units sold for N4.9 billion.
Okitipupa Plc also remained as the most traded stock by value on a year-to-date basis with 153.6 million valued at N4.9 billion, trailed by FrieslandCampina Wamco Nigeria Plc with 19.5 million units sold for N750.2 million and Impresit Bakolori Plc with 533.9 million units worth N520.9 million.
By Adedapo Adesanya
The Naira traded mixed in the foreign exchange (FX) market on Thursday, appreciated against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) and depreciating in the black market.
In the parallel market, the Nigerian currency weakened against the greenback during the trading day by N5 to sell for N1,625/$1, in contrast to the N1,620/$1 it was traded a day earlier.
However, in the official market, the domestic currency improved its value against its American counterpart by 0.1 per cent or 89 Kobo to trade at N1,609.57/$1 compared with the N1,610.46/$1 it was exchanged at midweek.
In the same spot market, the Naira tumbled against the Pound Sterling on Thursday by N7.75 to settle at N2,145.48/£1 versus Wednesday’s closing price of N2,137.73/£1 and gained N3.35 against the Euro to close at N1,818.41/€1 compared with the previous day’s N1,821.41/€1.
Sustained pressure on the country’s external reserves and a widening demand-supply gap in the FX market have weakened the Naira in the past few sessions.
However, there is evidence that debt repayments made from the external reserves have yielded outcome as the International Monetary Fund (IMF) has removed Nigeria from its Total IMF Credit Outstanding list after repaying the $3.4 billion pandemic loan.
Nigeria was among the countries that relied on the IMF for funding support and it has repaid the loan, prompting the lender to remove its name from the debtors’ list.
The journey towards clearing this debt began in earnest in 2023, when the nation’s IMF debt stood at $1.61 billion, reaching $472 million by January 2025.
Meanwhile, the cryptocurrency market soared yesterday in response to US President Donald Trump’s hyping up a trade deal with the United Kingdom, which offered the market some respite as it signaled reducing risk.
Bitcoin (BTC) was up by 4.3 per cent to $103,130.67, Ethereum (ETH) surged by 18.1 per cent to $2,249.11, Cardano (ADA) rose by 9.1 per cent to $0.7675, Dogecoin (DOGE) appreciated by 8.8 per cent to $0.1965, and Solana (SOL) jumped by 8.7 per cent to $163.25.
Further, Ripple (XRP) grew by 5.9 per cent to $2.30, Litecoin (LTC) went up by 4.3 per cent to $95.59, and Binance Coin (BNB) increased by 2.9 per cent to $628.48, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed lat at $1.00 each.
By Adedapo Adesanya
crude oil prices were up by around 3 per cent on Thursday following a breakthrough in looming trade talks between the US and China, the world’s two largest oil consumers.
Brent crude futures gained $1.72 or 2.8 per cent to trade at $62.84 a barrel and the US West Texas Intermediate (WTI) crude futures rose by $1.84 or 3.2 per cent to finish at $59.91 per barrel.
The US Treasury Secretary, Scott Bessent, will meet with China’s top economic official in Switzerland on May 10 for negotiations over a trade war disrupting the global economy.
Optimism around those talks was providing support to the market just as President Donald Trump on Thursday unveiled the broad outline of a trade agreement with the United Kingdom.
The deal is the first by the US with a country whose imports were subject to new tariffs imposed by Trump in early April.
The trade deal leaves in place a 10 per cent tariff on goods imported from the UK while Britain agreed to lower its tariffs to 1.8 per cent from 5.1 per cent and provide greater access to US goods.
He said that the deal includes “billions of dollars of increased market access for American exports,” and that the UK will “reduce or eliminate numerous nontariff barriers that unfairly discriminated against American products.”
On the supply front, the Organisation of the Petroleum Exporting Countries and its allies in OPEC+ will increase its oil output, pressuring prices.
According to Reuters, OPEC oil output edged lower in April despite a scheduled output hike taking effect, led by a cut in Venezuelan supply on renewed US attempts to curb the flows and smaller drops in Iraq and Libya.
Market analysts warned that a US-Iran nuclear deal could drive Brent prices down toward $50 per barrel on increased global supply, but without a deal prices could rise to over $70.
US sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names.
This is evidence of the disruption that the US stepped-up pressure is inflicting on Iran’s biggest oil buyer.
Five independent refineries in the Shandong province stopped buying Iranian crude in April for fear of being next on the list of sanctions.
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