SEC, PenCom, NGX To Boost Stock Market Liquidity With Securities Lending

In line with its commitment to enhance investor participation in the Nigerian capital market, boost secondary market liquidity, and facilitate savings mobilization to drive economic growth, Nigerian Exchange Limited (NGX) in collaboration with the Securities and Exchange Commission (SEC) and National Pension Commission (PenCom) is set to hold a Securities Lending Webinar.
The event holding on August 9, 2023 with the theme, ‘Business Facilitation Act 2023 as a catalyst for deepening Securities lending in Nigeria’, will bring together various stakeholders, including retail and institutional investors, Pension Funds Administrators (PFAs), Fund Managers, ETF Issuers, Trading License Holders, Regulators, and intermediaries in the Nigerian capital market.
NGX in a release said “they will have the opportunity to gain insights into the securities lending landscape, product features, benefits for investors and intermediaries and the broader capital market.”
According to NGX, the event, supported by the Central Securities Clearing System Plc (CSCS), Cardinalstone, Stanbic IBTC Nominees, and the Pension Fund Operators Association of Nigeria (PenOp), boasts an impressive lineup of speakers, offering insights and expertise from various key players in the Nigerian financial landscape.
“Among them are the chief executive officer of NGX, Mr. Temi Popoola; the Chief executive officer of Stanbic IBTC Nominees, Mr. Babatunde Majiyagbe; the director of Registration, Exchanges, Market Infrastructure and Innovation at SEC, Mr. Abdulkadri Abass; the chief executive officer of PENOP, Mr. Oguche Agudah; the head of Investment Supervision at the National Pension Commission (PENCOM), Mr. Ibrahim Kangiwa; among others.
Securities lending is the market practice of temporarily transferring securities, for a fee, from their holder (the lender) to another party (the borrower), with the borrower agreeing to return the securities to the lender either on-demand or at the end of the agreed loan term.
This practice usually requires the borrower to collateralise the transaction with cash or other securities of a value equal to or greater than that of the lent securities, in order to protect the lender against counterparty credit risk. Securities lending plays an important role in capital markets by providing liquidity, which in turn reduces the cost of trading and promotes price discovery.