Preparation for seamless take-off of the proposed Lagos Commodity and Futures Exchange (LCFE) was strengthened, as the Association of Stockbroking Houses of Nigeria (ASHON) and the Nigerian Stock Exchange (NSE) signed a Memorandum of Understanding (MOU) last week.
The MoU, which was signed in Lagos by ASHON’s Chairman, Patrick Ezeagu and the exchange’s Chief Executive Officer, Oscar Onyema, was aimed at creating professional and technical relationship between the two institutions for enhanced trading on commodities and futures.Speaking after the signing ceremony, Ezeagu explained that the MOU signed would enable LCFE access the superior technological capacity of the NSE as the oldest Stock Exchange in Nigeria,
According to him, LCFE would “hit the ground running” once it is able to perfect the registration process with the Securities and Exchange Commission (SEC).
Commenting on the strategic objective of signing the MoU with NSE, Ezeagu said it was to have a technical partner that has competence to enable it commence trading immediately after the regulatory approval without setting up a new platform.
“What we have done is to tap on the existing capacity that is already at The Nigerian Stock Exchange so with that we cannot get it wrong,” he said. Corroborating him, Onyema explained that the NSE was willing and well positioned to support capital market development and provide necessary expertise to other emerging exchanges around the continent.
Congratulating ASHON on the bold initiative, Onyema said: “The association has championed the establishment of the Lagos Commodity and Futures Exchange and this MoU that we signed today is an MoU that would position the NSE to provide technology and other technical support to the Lagos Commodity Exchange.“As you know, we do have a service that we use to provide such support for other emerging exchanges around the continent, given the expertise that we have developed over the years and so the significance is that we are supporting market development and we are providing expertise to make it easier and more cost effective for an exchange such as the Lagos Commodity exchange to hit the ground running” he said
The Acting Chief Executive Officer of the proposed LCFE, Akin Akeredolu-Ale, also reiterated the strategic position of the NSE in providing technical and technological support for the LCFE.
“The NSE has strong capacity for trading in equities, derivatives and commodities. The Central Securities Clearing Systems Plc (CSCS), which is tightly coupled with the NSE, will enable seamless and smooth operations of the Commodity Exchange.
“The Exchange has a platform that is very current and up to date. It maintains globally international standard and certified too. Therefore, instead of reinventing the wheels and deploying resources to setting up a new platform, we have decided to engage the Nigerian Stock Exchange as our technical and technological partners.
“What it does for us is that it collapsed the moratorium period for almost two years it would have been required of us to set-up a system and then set-up a platform and we would have spent millions of dollars in setting up this platform.
This MoU is saving us that volume of resources and what this does for us is that the commodity exchange would be able to hit the ground running”, Akeredolu-Ale said.Speaking on the commencement of trading, Akeredolu- Ale, stated that the first set of spot trade would kick-off before the end of the first quarter of this year and would run for the next twelve to eighteen months before moving to trading in contract.
He also explained that there would be immediate activation of remote trading through which people can trade from off the exchange.He assured investors that a well structured and transparent approach to price discovery of various commodities and refinancing mechanism will be creating for better returns on investment.
By Helen Oji
The Guardian Newspaper February 5th, 2018