NSE, SEC Enhance Capacity for Efficient Derivatives Market

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Goddy Egene

In a bid to ensure an efficient derivatives market, the Nigerian Stock Exchange (NSE) and the Securities and Exchange Commission (SEC) yesterday organised a capacity building workshop for operators.

The workshop, which was on the legal and regulatory requirements of derivatives trading for capital market operators, was put together to guide market participants to properly interpret the approved exchange traded derivative rules and recently released SEC’s derivatives and clearing rules, as well as address concerns on the on-boarding process.

Delivering the opening remarks, the Chief Executive Officer, 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 Organisation 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.”

Also speaking, on the rules guiding the derivatives market, Head of Department, Registration, Exchanges, Market Infrastructures and Innovation, SEC, Mr. 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 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.”

Providing guidance on the legal framework guiding derivatives trading, Senior Associate at Austen Peters, Mr. Michael Dugeri, emphasised the importance of market, financial integrity and investors’ protection.

Meanwhile, trading at the stock market remained bearish as the NSE All-Share Index shed 0.35 per cent to close at 28,432.27, while market capitalisation shed N52.1 billion to close at N14.7 trillion.

Activity level was mixed as volume traded rose 3.4 per cent to 254.9 million shares while value traded decreased 3.1 per cent to close at N3.0 billion.