Mr Oscar Onyema, NSE DG
United Bank of Africa (UBA) Plc and Stanbic IBTC Plc have been appointed securities lending agents for equities and bond transactions at the Nigeria Stock Exchange (NSE).
Securities lending is the act of loaning a stock, derivative or other security to an investor or firm. It requires the borrower to put up collateral, either in cash, security or a letter of credit.
An investigation by the News Agency of Nigeria (NAN) showed that the two banks emerged tops from the five commercial banks that submitted applications for the scheduled market making activities.
Management sources at the Securities and Exchange Commission (SEC) and the NSE who confirmed the appointments to NAN, said other banks would soon be licensed.
The source said that the commission had requested interested companies and firms to forward their operating credentials and formal applications for SEC’s evaluation and subsequent approval.
On market making, he said that the commission was scrutinising market making rules submitted by the NSE for regulatory due diligence and wide acceptance.
Confirming the licensing of UBA and Stanbic IBTC, another management source at the NSE said that the two banks would quicken the take-off of market making activities.
According to him, the 10 appointed market markers have concluded arrangements for a workshop on market making activities for capital market stakeholders.
He said that the workshop, coming on the heels of two securities lending agents, aims at ensuring proper understanding and acceptability of market making before its take-off.
Earlier, Mr Oscar Onyema, Chief Executive Officer of NSE, said that the Exchange was ready for the take-off of market making initiatives.
Onyema said the Exchange was in the interim working closely with selected market regulators to ensure general market readiness.
He said that it was anticipated that outstanding issues such as the approval process for securities lending agents would soon be addressed by the regulators.
NAN recalls that 10 stockbroking firms were in April unveiled as the NSE market makers.
The firms are Stanbic IBTC, Renaissance Capital, Future View Securities, Vetiva Capital and ESS/DunnLoren Merrifield.
Others selected from the 20 firms that applied include WSTC, Capital Bancorp, FBN Securities, Greenwich Securities and CSL Stockbrokers.