SEC releases new guidelines on securities settlement

The Securities and Exchange Commission, SEC has released a new guideline for the settlement of securities.

The new guideline is in pursuant to the powers of the Securities & Exchange Commission (SEC) conferred on it by section 13 and further section 312 (3) of the ISA 2007 and in exercise of the powers conferred on the Central Bank of Nigeria (CBN) by section 47 (2) of the CBN Act 2007 to promote and facilitate the development of efficient and effective systems for settlement of transactions, the SEC and the CBN hereby issue the following guidelines for the settlement of all types of securities in Nigeria.

The SEC said  to promote competitive, efficient, safe and sound post trading arrangements in Nigeria. This should ultimately lead to greater confidence in securities markets and better investor protection and should in turn limit systemic risk.

The SEC also said in addition, the guidelines seek to improve the efficiency of the market infrastructure, which should in turn promote and sustain the integration and competitiveness of the Nigerian securities markets.

The guidelines set out the procedures for the settlement of securities in Nigeria, including the rights and obligations of the parties.

It also covers the settlement procedures and settlement cycle for the trades executed in the following exchanges:

  1. The Nigerian Stock Exchange traded securities.
  2. FMDQ Over The Counter (OTC) Securities.
  3. NASD Over The Counter (OTC) Securities
  4. Nigerian Commodity Exchange (NCX) traded securities.
  5. Afex Commodities Exchange.
  6. Parties to Securities Settlement in Nigeria:

Also, parties to Securities Settlement in Nigeria shall include but not limited to:

  1. Capital Market Registrars.
  2. Central Bank of Nigeria
  3. Central Securities Clearing System (CSCS) PLC (Central Securities Depository Clearing & Settlement Agent)
  4. Custodians
  5. Dealing Members Firms
  6. Deposit Money Banks (DMBs).
  7. Discount Houses.
  9. Investors.
  10. NASD OTC
  11. Nigerian Commodity Exchange (NCX)
  12. Nigeria Inter-Bank Settlement System PLC (NIBBS)
  13. Nigerian Stock Exchange (NSE)
  14. Payment /Infrastructure Service Providers.
  15. Securities & Exchange Commission
  16. Commodity Warehouses
  17. Other Financial Institutions (OFIs) as may be approved by the CBN or SEC in the future.
  18. Afex Commodities Exchange

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