The Nigerian financial services sector is agog as all is now set for the formal launch of NG Clearing Limited, the first central counterparty (CCP) in West Africa, Thursday, 9 December 2021.
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 in Nigeria’s capital market. As the premier CCP in Nigeria, NG Clearing will facilitate the clearing and settlement of exchange-traded derivatives, manage counterparty risk, reduce systemic risk, 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 seamless and safe clearing of derivatives across multiple asset classes and trading venues. NG Clearing also obtained approval from the Securities and Exchange Commission 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.
Mr. Oscar N. Onyema, OON, the Chairman of the Company’s Board of Directors, enthused that 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”.
Speaking of NG Clearing’s role as a CCP, the Company’s Chief Executive Officer, Mr. Tapas Das, noted that “across the world, CCPs have emerged to strengthen financial markets, propelling them to growth and reinforcing 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.”
As part of the build-up to the launch of NG Clearing, the Company has been engaging capital market stakeholders on derivatives clearing and settlement, and the role of a CCP. On the Company’s engagement with stakeholders, the 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 also noted that the Company will expand the training engagements to the public soon.
The launch ceremony is a hybrid event (physical and virtual), and virtual participants can register ahead via https://bit.ly/NG-ClearingLaunch.
About NG Clearing Limited
NG Clearing Limited (“NG Clearing”) is Nigeria’s premier central counterparty (CCP) and serves as a market-wide financial market infrastructure (FMI) in Nigeria. The Company was incorporated in May 2016. In September 2020, the Company received an approval-in-principle from Securities and Exchange Commission (SEC) to provide CCP services in Nigeria, and a final approval was issued by the SEC in June 2021. The establishment of NG Clearing is in line with its strategy to support the growth and development of the Nigerian capital market as the “gateway to African Markets”. The establishment of NG Clearing will position the Nigerian capital market as a leader amongst emerging markets by facilitating greater market transparency, increase trading volumes, and overall improvement of the efficiency and competitiveness of the Nigerian capital market. NG Clearing will also pave the way for the smooth introduction of exchange-traded derivatives and other financial instruments in the market, by delivering best-in-class post-trade services that manage counterparty credit risk and reduce systemic risk in the Nigerian financial system.
What a CCP entails
A central counterparty is a critical financial market infrastructure that facilitates the clearing and settlement of derivatives and other securities as well as the management of counterparty credit risk.
