Capital market widens as SEC clears central counterparty
By Kayode Tokede
Securities and Exchange Commission (SEC) has granted NG Clearing Limited (NG Clearing) registration to become a central counterparty (CCP).
The registration permits NG Clearing to clear and settle exchange traded derivative products. The registration took effect from June 7.
Chairman, NG Clearing Limited, Mr. Oscar Onyema, said NG Clearing would deliver an unparalleled CCP experience for the financial and capital markets.
According to him, the company will optimise the deployment of its resources to achieve long-term value creation for its stakeholders using a state-of-the-art risk management framework, which complies with global best practices for mitigating settlement risk.
He added that the company’s main role is to improve the soundness and safety of the financial market by delivering best-in-class post-trade services that manage counterparty credit risk and reduce systemic risk by interposing itself as a guarantor to both parties in a transaction, thus ensuring the successful execution of derivatives and other trades from various trade points in Nigeria.
Managing Director, NG Clearing Limited, Mr. Tapas Das said the company shall be playing a key role in the financial market ecosystem in the region, upholding stability and safety of the marketplace, through efficient and timely settlement of derivative trades.
According to him, the aim is to strengthen the country’s investment environment through solutions that systematically reduce risks, enhance operating efficiency, and minimise costs for market participants, thereby serving as a catalyst to development.
Das stated that the company has sufficient financial resources, including settlement guarantee fund, to cover participants’ risk exposures.
He noted that members would have access to several financial reports that equip them with extensive knowledge and enable them make informed decisions, as well as access to NG Clearing’s bespoke clearing and settlement software application which will support the clearing and settlement of derivative instruments across various asset classes i.e., futures and options contracts on indices, equity shares, commodities, currency, rates etc.
NG Clearing was incorporated on May 24, 2016 to facilitate derivatives trading in the market.
The company is promoted by the Nigerian Exchange Group (NGX) Plc and Central Securities Clearing System Plc (CSCS) along with key stakeholders, including Nigeria Sovereign Investment Authority (NSIA), Access Bank Plc, Consonance Kuramo Special Opportunities Fund I, Coronation Merchant Bank Limited, Greenwich Merchant Bank Limited, Union Bank of Nigeria Plc (Union Bank), United Bank for Africa Plc (UBA) and Association of Securities Dealing Houses of Nigeria (ASHON)
