The Securities and Exchange Commission (SEC) disclosed that it had devised a framework that would enable efficiency in trading and settlement activities.
This was shared in a statement tagged, “interoperability/FMI Link Framework Among Central Securities Depositories.”
The commission stated that the growth o the Nigerian capital market has impacted the structure of the market composition and interconnectedness.
It added that the need for an interoperability system was magnified by the necessity for efficiency of trading and settlement functions, which would also align the commission’s activities with international best practices.
“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.
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“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,” the statement said.
It added that “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.”
The commission urged all Securities Exchanges and Central Securities Depositories (CSDs) to ensure that the necessary steps are observed to put in place important infrastructure and systems for the “implementation of the framework, including any amendments to the relevant rules and regulations.”
It also requires that CSDs “Bring to the attention of their members and Participants the provisions of this
framework as well as publish the same on their websites and;
“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.”
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