In preparation for the launch of the Exchange Traded Derivatives (ETDs) Market, Nigerian Exchange (NGX) Limited continues to embark on capacity building exercises for capital market stakeholders. In collaboration with NG Clearing (NGCL) Limited – the Central Counterparty Clearing System for the NGX derivatives market – NGX will host a free training for firms that have applied to participate in the derivatives market on Wednesday, 7 April 2021.
Facilitated by members of both the NGX and NGCL teams, the training will focus mainly on Derivatives Margining Process and Account Segregation Policy; introduce participants to Clearing Members; and provide insights into the imminent launch of the derivatives market.
In laying the groundwork to build a standardized derivatives market, NGX has since worked with the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) to establish the optimal regulatory and legal framework for derivatives in the Nigerian capital market.
With the ultimate goal to ensure that there is widespread understanding of Derivatives, its applicability and how investors can reap maximum value from the asset class, NGX has collaborated with both local and international organisations to facilitate in-depth capacity building programme on the derivatives market. In 2020, a training was hosted in collaboration with the SEC to address the legal and regulatory requirements for the derivatives market. A virtual derivatives workshop also held in September 2020 with the theme, Adopting Derivatives During Stressed Market Conditions which provided a better understanding of the application of derivatives in hedging against the crisis emanating from the COVID-19 pandemic.
Also, through its learning and development arm, X-Academy, NGX hosted a five-day training from 14 to 18 September, 2020 to prepare capital market players who wished to undertake the Chartered Institute for Securities & Investment UK Global Derivatives qualification exam. Reportedly, further trainings will be held for other stakeholder groups in the near term.
It is expected that NGX will introduce the first set of equity-linked products such as index-futures that meet global best practices allowing foreign & domestics investors and investment managers to appropriately hedge against downside risk.