WED, JUNE 26 2019-theG&BJournal-The Acting Executive Commissioner (Operations) of the Securities and Exchange Commission (SEC), Mr Isyaku Tilde said that the Commission has commenced the implementation of the report of its Technical Committee on Commodities Trading Ecosystem.
Tilde, disclosed this when a delegation of the Commodity Brokers Association of Nigeria (CBAN) led by its Registrar, Alhaji Saleh Kwaru, visited the Commission in Abuja today.
The Technical Committee report was published in 2018 by SEC as part of its implementation of the 10-year Capital Market Master Plan. The Committee was tasked with identifying the challenges of the existing framework andinfrastructure and develop a roadmap for a vibrant ecosystem.
Among the Committee’s recommendation is the need to commence advocacy for macroeconomic stability and policies which will promote the commodity market (exchange rate, interest rate, inflation rate, infrastructure etc.); advocacy for amendment of existing legislations such as the Land Use Act and Bankruptcy Law which impede the development of the market; review SEC rules and regulations relating to commodity exchanges especially rules on the spot market, and make rules on collateral management.
Tilde hinted that report is already in implementation stage starting with capacity building for stake holders and the public on commodities exchange to bridge existing knowledge gap.
“The aim of SEC is to have an efficient commodities exchange because right now that sector of the capital market is dormant. I believe that part of the things CBAN is doing is capacity building, which is one area where we can collaborate going forward,” Tilde said while addressing the CBAN executives who said they came to seek the support of SEC on how to facilitate its members licensing as brokers.
CBAN Registrar told SEC that they now have close to 200 commodities brokers registered with NCX who are ready to operate as soon as NCX trading platform is ready.
He also solicited the commission’s support for CBAN’s push to secure presidential assent to the Chartered Institute of Commodity Brokers Association of Nigeria (CICBN).
Kwaru commended SEC for developing the Nigerian Capital Market Master Plan, and for registering two private commodities exchanges to open up the market.
The two private markets in question are Afex Commodities Exchange, which started operations in 2014, and the Lagos Commodities and Futures Exchange, whose final approval came earlier this month.
Explainer:
A commodity market is a market that trades in the primary economic sector and consists of multiple players that form the agricultural value chain. They include commodity exchanges, farmers, merchants, aggregators, processors/producers, commodity market operators, warehouse operators, collateral managers, banks, insurance companies, clearing houses, and logistic companies.
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