Nigerian Exchange hosts free training for derivatives traders

The Nigerian Exchange (NGX) Limited in collaboration with NG Clearing (NGCL) Limited, the Central Counterparty Clearing System for the NGX derivatives market, held free training for firms that have applied to participate in the derivatives market on Wednesday, April 7, 2021.

The training with the focus, Derivatives Margining Process and Account Segregation Policy, was hosted by the Divisional Head, Trading Business, NGX Limited, Mr Jude Chiemeka and facilitated by Head, Retail Investor Coverage, NGX Limited, Ms Chidinma Chukwueke-Okolo and Chief Operating Officer, NGCL, Mr Ayokunle Adaralegbe.

In laying the groundwork to build a standardized derivatives market, NGX has worked extensively with local and international partners. Speaking on these efforts, Mr Jude Chiemeka has previously stated, “NGX is committed to building a derivatives market that meets global standards. We have worked with regulators such as the Securities and Exchange Commission and the Central Bank of Nigeria 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.”

With the ultimate goal to ensure that there is a widespread understanding of Derivatives, the applicability and how investors can reap maximum value from the asset class, NGX has collaborated with both local and international organisations to facilitate an 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 14th to 18th September 2020 to prepare capital market players who wished to undertake the Chartered Institute for Securities & Investment UK Global Derivatives qualification exam. Reportedly, further training 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.