Nigeria to get netting law soon – Aig Imoukhuede

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Aigboje Aig-Imoukhuede

The President Nigerian Stock Exchange (NSE), Mr Aigboje Aig-Imoukhuede, has attributed the delay in the introduction of derivatives by the Exchange to absence of netting laws.

Aig-Imoukhuede told NAN-TV on the sidelines of the Nigerian Structured Products Summit organised by the Capital Market Solicitors Association (CMSA) in Lagos that efforts were being made to present a bill to the National Assembly. NAN reports that netting is a risk management tool that allows counter-parties to trade efficiently, without sitting on gross capital.

It entails offsetting the value of multiple positions or payments due to be exchanged between two or more parties, and it can be used to determine which party is owed remuneration in a multiparty agreement.

* Video by Iyiola Pedro

Derivatives are financial contracts that derive their value from an underlying asset like stocks, indices, commodities, currencies, exchange rates, or the rate of interest.

“Unfortunately I can’t speak for the pace and speed at which the netting law will be passed, that’s a fundamental element of the process.

“What we can say is that we would certainly ensure that we can get a netting bill in draft form in front of the national assembly, “he said.

NAN reports that the event was organised in partnership with the International Swaps and Derivatives Association and ABA Section of International Law. (NAN)

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