NSE set to launch West Africa’s first Exchange-traded derivatives

The Nigerian Stock Exchange (NSE) is set to launch West-Africa’s first Exchange-traded derivatives. This is sequel to the recent registration of NG Clearing by the Securities and Exchange Commission (SEC), as a premier Central counterparty Clearing House.

The platform established by paramount key players in the Nigerian Financial landscape such as the NSE, Central Securities Clearing System and top-ranked banks, will enable NG Clearing perform efficient and timely settlement of derivative trades, ensuring safety and stability of the financial system. In lieu of this, capital market players expect NG Clearing to align with the highest standards of global best practices in delivering clearing and settlement services.

All things being equal, the introduction of ETDs on the NSE, will help strengthen Africa’s position in the global financial markets, addressing price, liquidity, and other financial risks usually associated to sophisticated financial transactions.

Speaking on the development, the CEO, NSE and Chairman, NG Clearing, Mr. Oscar N. Onyema OON, was quoted in one of the national dailies, where he stated that, “Our main role is to improve the safety of our financial markets, 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.”