LAGOS, AUGUST 11, 2016 – The Nigerian Stock Exchange (NSE) has said derivatives trading slated for fourth quarter of 2016 would now be launched in the first quarter of 2017.Mr Haruna Jalo-Waziri, NSE Executive Director, Capital Markets, confirmed this on Thursday in Lagos.
Jalo-Waziri said that the fourth quarter target would no longer be feasible due to unforeseen circumstances.
Derivative is a security with a price that is dependent upon or derived from one or more underlying assets.
Derivative is a contract between two or more parties based upon the asset or assets. The value of the asset or assets in question is determined by fluctuations in the underlying asset.
The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.
Jalo-Waziri said that the NSE needed to strengthen the derivatives legal framework to ensure its seamless operation before launching the product.
He said that NSE needed to strengthen and tackle issues pertaining to bankruptcy law before launching it.
Jalo-Waziri said that everything that would kick-start derivatives trading would be concluded in the next six months.
“Mostly likely in the first quarter of 2017 derivatives trading will be launched by NSE,” he said.
Mr Oscar Onyema, NSE Chief Executive Officer, had in 2014, said that NSE would commence trading on derivatives in 2016.
According to Onyema, the aim is in fulfillment of the exchange’s decision to introduce five asset classes in five years.
He said that the exchange-traded derivatives market was in line with its market deepening initiatives to allow investors create well-diversified portfolios of uncorrelated asset classes.
