NG Clearing trains market participants on Derivatives Clearing
As part of the progress towards the launch of the first exchange-traded derivatives in West Africa, NG Clearing Limited (“NG Clearing”), a Central Counterparty (“CCP”) licensed by the Securities Exchange Commission (“SEC”) in collaboration with the Nigerian Exchange Limited (“NGX” or the “Exchange”) organized a stakeholder training session for Clearing Members (“CMs”) and Trading Licence Holders (“TLHs”), titled “Derivatives Clearing Demystified”. The training started on Monday, November 8, 2021, and ended on Wednesday, November 10, 2021, with various attendees from eight (8) prospective TLHs licensed by the Exchange and two (2) CMs licensed by SEC.
The objective of the training was to provide participants an opportunity to interact with the Derivatives Clearing Experts and Consultants at NG Clearing. The training also provided a deeper dive into the tools, processes, and workflows of the Derivatives clearing business. The training was facilitated by the Chief Operating Officer (“COO”) at NG Clearing, Ayokunle Adaralegbe and an external Consultant. In the COO’s opening remarks, he emphasised on the need for the adoption of the Derivatives in Nigeria as it does not only enhance the Nigerian Financial Market but also promotes the Economic growth in Nigeria. He explained the importance of the CCP in the Financial Ecosystem and its role in enhancing Post Trade Services. He therefore encouraged the CMs and TLHs to consider the participation in the Derivatives Market as a cost-efficient trading option.
Ayokunle Adaralegbe further highlighted the reason for NG clearing’s commitment to engaging market stakeholders. In his words, “NG Clearing understands that there is a dearth of practical knowledge about derivatives clearing in Nigeria. As Nigeria’s Premier Central Counterparty, the onus is on us to drive the deepening of knowledge about derivatives in Nigeria. Beyond market stakeholders, we will be engaging members of the public in subsequent weeks.”
The training provided an insight on how NG Clearing provides key services such as Risk Management, Clearing & Settlement and Collateral Management by managing counterparty risk through centralised margining system and guaranteeing the performance of trades even in the event of counterparty default. The also training provided a walkthrough on the understanding of Derivatives, the pertinence and how TLHs can help investors increase value from the Asset Classes to be introduced by the Exchange.
NG Clearing will continually engage stakeholders to further enlighten the market about the business and deepen the knowledge of Market Participants on Derivatives Clearing and the role of NG Clearing in the Nigerian financial system.