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NGX Widens Traders’ Understanding of Derivatives Market

By Aduragbemi Omiyale

On Wednesday, April 7, 2021, organisations interested in deepening their knowledge of the derivatives market were taken through the rudiments of the asset class.

Participants were tutored on the application of the derivatives market and how investors can reap maximum value from the investment tool.

The training was organised by the Nigerian Exchange (NGX) Limited in collaboration with NG Clearing (NGCL) Limited, the central counterparty clearing system for the NGX derivatives market.

The free training focused on Derivatives Margining Process and Account Segregation Policy and was hosted by the Divisional Head, Trading Business, NGX Limited, Mr Jude Chiemeka.

The facilitators of the free training were the Head of Retail Investor Coverage at NGX Limited, Ms Chidinma Chukwueke-Okolo and the Chief Operating Officer, NGCL, Mr Ayokunle Adaralegbe.

“NGX is committed to building a derivatives market that meets global standards. We have worked with regulators such as the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) to establish the right regulatory and legal framework for derivatives in our market.

“We also continue to build on the trading infrastructure that will ensure domestic and foreign stakeholders are able to trade seamlessly once we launch within subsequent months,” Mr Chiemeka stated.

At the event, the management of the NGX said very soon, the first set of equity-linked products such as index futures that meet global best practices allowing foreign and domestic investors and investment managers to appropriately hedge against downside risk would be introduced.

The exchange has worked extensively with local and international partners to widen the understanding of the concept.

In 2020, it hosted a workshop 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 and it provided a better understanding of the application of derivatives in hedging against the crisis emanating from the COVID-19 pandemic.

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