SEC, operators mull framework for derivative market by 2020

Experts in Nigeria’s derivative market have disclosed plans by the Securities and Exchange Commission (SEC) Nigeria, to roll out a regulatory framework for the market by 2020.
 
According to them, there are ongoing talks with SEC to regulate the Foreign Exchange (FX) business in Nigerian, to strengthen customers’ confidence in the market. Speaking at a seminar organised by Hantec Global Limited (HGL), in Lagos, to sensitise Nigerians on the importance and principles of currency trading, Managing Director, Hantec Africa, Mike Fowope, said the framework will ensure that business practitioners adhered strictly to the rules and that investors’ monies are safe.
 
He disclosed that SEC is coming up with a draft for the framework, saying the delay in its roll is due to the non-constitution of the Commission’s board.He said the regulatory process will commence once the board has been constituted, saying: “We have had a meeting with the team and they have also invited us for conversations on the process, as we are a major player in the industry.

“I believe that before the end of 2020, the market will be regulated and when this is done, more Nigerians will have confidence in trading, and would be willing to invest more funds in the market.

“Actually, there is still a little bit of doubt from Nigerians, but we are putting in a lot of mechanism in place to ensure that the doubt is watered down by getting regulatory framework in other jurisdictions.“We are submitting a white-paper to them as part of our contribution to the regulatory framework, and I believe that maybe before the end of 2020 the market locally in Nigeria will be regulated.”

Meanwhile, Fowope charged players to maximise opportunities in the in the market by making use of Internet Technology (IT), and Artificial Intelligence (AI) solutions in their trading activities, and urged youths to embrace FX to harness the opportunities in the financial market regardless of their age and educational backgrounds.“Machines are creating disruption mechanisms and people should be able to embrace the Y2K compliance in order to thrive. If people embrace IT and AI, they will make more money.

“Regardless of what the youths are doing at the moment, even as students, they can still trade, rather than charting their lives away, they could turn their phone into a ‘Dollar Dispensing Device’,” he added.Earlier in his remarks, Founder/Chief Executive Officer, HGL, Yu Lap Tang, said the Nigerian economy is currently on the path to positive growth given to the exchange rate stability in the country.
 
According to him, Nigeria’s exchange rate has been stable in the last two years, noting that he sees the possibility of the Naira appreciating more in the coming year.He described Nigerians as hardworking and eager to invest in productive ventures to increase their earnings, saying that was the right model for any economy desiring to grow.He said: “I see the fastest growing economy in Nigeria compared to many of the countries I have been to. Not only the economy, I see people hungry to invest their money and hungry to earn money.

“I don’t see Nigerians as lazy or relaxed people. I see them as people ready to do several other things to grow their income. I see that as the right model for a growing economy. Nigeria’s currency is stable now compared to where it was four years ago.”
He said the US-China trade war impacted the global economy, noting that in the currency market, the U.S. dollar has been very strong since President Trump broke the issue of trade sanction with China.”I think overall, it is going to be a good thing if the trade pact can be arranged between China and the US, and I believe it will be and it will be good for the global economy,” he added.