CCP to boost NG clearing market safety

The Nigerian financial services sector is set for reinforcement as the NG Clearing Limited will on Thursday launch Central Counterparty (CCP) service to strengthen market safety.

According to its CEO, Mr Tapas Das, “CCPs have emerged across the world to strengthen financial markets, propel them to grow and reinforce existing layers of market safety. We have left no stone unturned in ensuring that Nigeria’s first CCP is positioned to become the most trusted CCP in Africa.”

Corroborating Das, the company’s Chairman, Mr Oscar Onyema, added that the NG Clearing’s emergence as “a CCP in Nigeria and the first out of West Africa is an epochal achievement, one that all stakeholders should be proud of as it represents the maturity and transition of the Nigerian capital market to a new era of clear possibilities”.

A statement from the Central Securities Clearing System (CSCS), one of its promoters, says the launch of NG Clearing precedes the trading of the first exchange-traded derivatives in the Nigerian capital market and opens new opportunities for investors, stakeholders, and other players.

NG Clearing, founded by The Nigerian Stock Exchange (now Nigerian Exchange Group Plc) and the Central Securities Clearing System (CSCS), is West Africa’s first CCP. It was established for the clearing and settlement of exchange-traded derivatives and commodities’ products in Nigeria.

The statement adds: “As CCP, NG Clearing’s central role is to improve the safety of the Nigerian capital market by delivering best-in-class post-trade service, manages counterparty credit risk and reduces systemic risk. It will also accelerate the Nigerian capital market as the gateway to African markets by facilitating greater market transparency, increasing trade volumes and overall improvement in the efficiency and competitiveness of the Nigerian capital market.

“As the premier CCP in Nigeria, NG Clearing will facilitate the clearing and settlement of exchange-traded derivatives and promote the safety and integrity of Nigeria’s capital market.:

“Since its incorporation in 2016, NG Clearing has achieved many first-of-its-kind milestones. A major milestone is the development of a world-class clearing and settlement system to enable the seamless and safe clearing of derivatives across multiple asset classes and trading venues. NG Clearing also obtained approval from the Securities and Exchange Commission (SEC) to provide CCP services in Nigeria. Recently, as an affirmation of the Company’s global outlook, NG Clearing joined CCP12, the global association of central counterparties”

As part of the build-up to the launch, the company has been engaging capital market stakeholders on derivatives clearing and settlement. On the Company’s engagement with stakeholders, its Chief Operating Officer, Mr Ayokunle Adaralegbe, explained that “as a novel niche, we understand that there is a knowledge gap in the market and the core of our strategy is stimulating the market with high-level training sessions that demystify derivatives clearing.”

He pledged that the company would expand the training engagements to the public soon.

The Thursday launch is a hybrid event (physical and virtual).

NG Clearing Limited is Nigeria’s premier central counterparty (CCP) and serves as a market-wide financial market infrastructure (FMI). (Sun)