SEC Proposes Interoperability and FMIs Link Framework Among Central Securities Depositories

Proshare

Tuesday, June 29, 2021 / 01:48 PM / By SEC Nigeria / Header Image Credit: Ecographics


Introduction

The Nigerian capital market has witnessed remarkable growth in the last few years in terms of size, market participants and tradable instruments. This has impacted the market structure in terms of composition and interconnectedness. In the secondary market particularly, there are currently multiple trading platforms and Financial Market Infrastructures (FMIs) which provide comparative services in depository, trading, clearing and settlement activities.


Consequently, Interoperability arrangement has become necessary in order to enhance the efficiency of trading and settlement functions as well as align the market with international best practices. According to the Committee on Payments & Market Infrastructures and International Organization of Securities Commissions (CPMI-IOSCO) Principles on FMIs, FMI link is a set of contractual and operational arrangements between two or more FMIs that connect the FMIs directly or through an intermediary. The Interoperability arrangement will potentially liberalize trading and settlement activities, enhance efficient deployment of capital as well as cost effectiveness in the market.


It is in this regard and the need to ensure the efficiency of the market and the protection of investors that this framework is being issued. In the Interoperability arrangement, as recommended by the CPMI-IOSCO Principles for FMIs, relevant provisions have been made for identification, monitoring and management of interlink risks by the respective CSDs with the overall objective of reduction in systemic risks.


This framework is being issued in line with the mandate of the Commission to regulate the capital market with the objective of ensuring protection of investors, maintaining fair and efficient market as well as reduction of potential systemic risks in trading, clearing and settlement ecosystem. In this regard, all Securities Exchanges and Central Securities Depositories (CSDs) are required to comply with the following:

  1. Take necessary steps to put in place requisite infrastructure and systems for implementation of the framework, including any amendments to the relevant rules and regulations;
  2. Bring to the attention of their members and Participants the provisions of this framework as well as publish the same on their websites;
  3. Communicate to the Commission, the status of implementation of the provisions of this framework within three months of the date of issuance of the framework;


Download Here - Interoperability Framework


Proshare Nigeria Pvt. Ltd.


Related News

  1. SEC Issues an Exposure of Proposed Sundry Amendments to its Rules on Filing of Materials, 19 Others
  2. SEC Proposes Amendments to its Rules on Custody and Transfer of Unclaimed Monies, NIPF
  3. SEC Nigeria Approves Chaka as the First Licensed Digital Sub-Broker
  4. SEC Nigeria Takes Over Leadership of The West Africa Securities Regulators Association (WASRA)
  5. SEC Rolls Out Regulatory Incubation Program for FinTechs Operating in the Nigerian Capital Market
  6. SEC Sets June 30 2021 as Deadline for Registration as a Crowdfunding Intermediary Platform
  7. SEC Sets Deadline of June 30 for Compliance with Crowdfunding Rules
  8. SEC Proposes New Rule On Social Bonds
  9. SEC Directs Existing Investment Crowdfunding Portals to Comply With Registration Requirements
  10. SEC's Regulations On Digital Sub-Brokers - Clarity for Online Inv. and Trading Platforms in Nigeria?
  11. SEC Proposes Rule for Processing Fees Payable for the Registration of ETD Products

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.
READ MORE:
Related News
SCROLL TO TOP