NG Clearing Limited has secured approval in principle from the Securities and Exchange Commission (SEC) to launch clearing and settlement of exchange-traded derivative products, as Nigeria’s premier Central Counterparty Clearing House (CCP).
This was disclosed in a circular issued by NG Clearing Limited, which was seen by Nairametrics.
As a Central Counterparty Clearing House (CCP), NG Clearing Limited will play a key role in Nigeria’s financial ecosystem, by ensuring the safety of the market through effective management of counterparty credit risk, which in turn, reduces the systemic risk in the Nigerian capital market, by guaranteeing the settlement of trades.
The company will optimize the deployment of its resources to achieve long-term value creation for its stakeholders using a state-of-the-art risk management framework, which complies with global best practices for mitigating settlement risk.
However, its risk-based additional collateral requirement will ensure that capital deployed by clearing members is always optimal.
Speaking about the purpose of NG Clearing Limited, the Board Chairman, Mr. Oscar N. Onyema OON, said, “Our main role is to improve the safety of our financial market, by delivering best-in-class post-trade services that manage counterparty credit risk, and reduce systemic risk. To mitigate these credit risks in an efficient and robust manner, we will interpose ourselves as a guarantor to both parties in a transaction, thus ensuring the successful execution of derivatives, and other trades from various trade points in Nigeria. We intend to deliver an unparalleled CCP experience for the Nigerian financial market.”
The company intends to deploy a competitive low-cost clearing fee regime for members. The company has sufficient financial resources, including a settlement guarantee fund, to cover participants’ risk exposures. Members will have access to a wide range of financial reports, that equip them with extensive knowledge and enable them to make informed decisions.
The Company’s Managing Director, Mr. Tapas Das, emphasized that NG Clearing shall be playing a key role in the financial market ecosystem in the region, by upholding the stability and safety of the marketplace, through an efficient and timely settlement of derivative trades.
“The aim is to strengthen the country’s investment environment through solutions that systematically reduce risks, enhance operating efficiency, and minimize costs for all market participants, thereby serving as a catalyst to national development” Das concluded.
