The Nigerian Stock Exchange (NSE) said it would soon launch Exchange Traded Derivatives (ETDs), which will be the first in West Africa.
According to NSE, this follows the registration of NG Clearing by the Securities and Exchange Commission (SEC) as a premier Central Counterparty Clearing House (CCP).
A statement from the NSE said that the approval-in-principle would allow the exchange to launch ETDs supported by NG Clearing in the risk management process.
Set up by key players in the Nigerian financial industry including NSE, Central Securities Clearing System (CSCS) and top-tiered banks, NG Clearing will play a key role in the financial market ecosystem by driving the safety and stability of Africa’s global marketplace through efficient and timely settlement of derivative trades.
Associated with a member exchange of the World Federation of Exchanges (WFE), capital market players can expect NG Clearing to align with the highest standards of global best practices in delivering clearing and settlement services.
Speaking on the development, the CEO of NSE and chairman, NG Clearing, Mr Oscar Onyema, stated that, “Our main role is to improve the safety of our financial market by delivering best-in-class post-trade services that manage counterparty credit risk and reduce systemic risk”.
“To mitigate these credit risks in an efficient and robust manner, we will interpose ourselves as a guarantor to both parties in a transaction, thus ensuring the successful execution of derivatives and other trades from various trade points. We intend to deliver an unparalleled CCP experience for the African financial markets.”