Derivatives have created an opportunity for a transparent financial contract – CEI

The President of the Chartered Institute of Stockbrokers CIS, Mr. Oluwole Adeosun, said that exchange-traded derivatives are essential in the market as they enable market sophistication, transparent financial contracts and offer a useful risk management tool for implement risk mitigation, or financial risk hedging strategies.

Adeosun, who made the statement during a virtual event organized by Nigerian Exchange (NGX) and CIS on the theme “Exchange-Traded Derivatives: Enhancing the Capital Market for Robust Value Creation”, said he was also presenting an acceptance alternative investment tool useful for pursuing diversification and investment strategies. In addition, he said that stockbrokers and securities dealers had undergone a series of training courses on derivatives and an adaptation had been synchronized with the examination program for stockbrokers and securities dealers. brokers.

NGX also said the training was designed to deepen the knowledge of market operators, investors and other stakeholders on how exchange-traded derivatives work and boost participation in the market segment.

In his opening remarks, the Managing Director of NGX, Mr. Temi Popoola, noted that the Derivatives Workshop is in line with the common aspiration of NGX and CIS to promote and protect the
interests of the securities and investment profession by upholding the highest standards of service and integrity. “Since 2017, the Exchange has been building the capacity of market participants on derivatives, leveraging X-Academy, our learning and capacity development platform. We are pleased to partner with CIS to organize this workshop aimed at facilitating a better understanding of how derivatives work, including how the contract is traded and settled on a day-to-day basis, the margining process and risk management issues. “, did he declare. said.

Earlier this year, NGX launched West Africa’s first exchange-traded derivatives market, featuring equity index futures. The launch saw the unveiling of equity index futures contracts based on the most followed and recognized equity indices in the Nigerian capital market – NGX 30 Index Futures and NGX Pension Index Futures. “We believe that NGX’s derivatives market will potentially meet the significant risk management needs of market participants such as PFAs, fund managers, corporate treasuries and trading licensees, being the first contact line for capital market investors. In addition, NGX Exchange Traded Derivatives will provide investors and other market participants with the necessary asset allocation and cost management tools for effective portfolio management,” Popoola added.

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