SEC releases new framework for central securities depositories – Economic Confidential


DG SEC, Dr Lamido Yuguda


SEC issues new framework for central securities depositories

The Securities and Exchange Commission has published an interoperability / financial infrastructure liaison framework between central securities depositories to improve the efficiency of trading, regulations and market alignment with international best practices.

The SEC said in a statement on Sunday that issuing the framework was essential as the Nigerian capital market has seen significant growth in recent years in terms of size, ownership and tradable instruments.

The regulator said this had an impact on the structure of the market in terms of composition and interconnection.

He said: “Therefore, an interoperability agreement has become necessary in order to improve the efficiency of the trading and settlement functions as well as to align the market with international best practices.

“According to the principles of the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions on MFIs, an IMF link is a set of contractual and operational arrangements between two or more MFIs that link MFIs directly or through an intermediary.

“The interoperability agreement will potentially liberalize trading and settlement activities, improve the efficient deployment of capital as well as profitability in the market.”

The SEC noted that efficiency and investor protection was essential to the IMF’s issuance.

He said: “In the interoperability agreement, as recommended by the CPMI-IOSCO principles for MFIs, relevant arrangements have been made for the identification, monitoring and management of interconnection risks by CSDs. with the overall objective of reducing systemic risks.

“This framework is published in accordance with the mandate of the commission to regulate the capital market with the aim of ensuring investor protection, maintaining a fair and efficient market as well as reducing potential systemic risks in the trading ecosystem,” clearing and settlement. ”

The SEC urged stock exchanges and CSDs to comply with the rules and regulations governing the framework and post them on their websites.


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