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SEC appoints UBA, Stanbic IBTC capital market lenders

By on August 21, 2012

NSE President, Onyeama

The Securities and Exchange Commission has appointed United Bank of Africa Plc and Stanbic IBTC Plc as securities lending agents for equities and bond transactions at the Nigerian Stock Exchange.

Securities lending is the act of loaning a stock, derivative or other security to an investor or firm. It requires the borrower to put up collateral, either in cash, security or a letter of credit.

An investigation by the News Agency of Nigeria showed that the two banks emerged tops from the five banks that submitted applications for the scheduled market making activities.

Top management sources at SEC and NSE, who confirmed the appointments to NAN, said other banks would soon be licensed.

The sources said that the commission had requested interested companies and firms to forward their operating credentials and formal applications for SEC’s evaluation and subsequent approval.

On market making, one of the sources said that the commission was scrutinising the rules submitted by the NSE for regulatory due diligence and wide acceptance.

Confirming the licensing of UBA and Stanbic IBTC, another management source at the NSE said that the two banks would quicken the take-off of the market making activities.

According to the source, the 10 appointed market markers have concluded arrangements for a workshop for capital market stakeholders.

The source said the workshop, coming on the heels of two securities lending agents, was aimed at ensuring proper understanding and acceptability of market making before its take-off.

Earlier, the Chief Executive Officer, NSE, Mr. Oscar Onyema, had said the Exchange was ready for the take-off of the market making initiative.

Onyema said the Exchange was in the interim working closely with selected market regulators to ensure general market readiness.

He said it was anticipated that outstanding issues such as the approval process for securities lending agents would soon be addressed by the regulators.

10 stockbroking firms were in April unveiled as the NSE market makers.

The firms include Stanbic IBTC, Renaissance Capital, Future View Securities, Vetiva Capital and ESS/DunnLoren Merrifield.

Others selected from the 20 firms that applied include WSTC, Capital Bancorp, FBN Securities, Greenwich Securities and CSL Stockbrokers.

 

Source: News Agency of Nigeria

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