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SEC Approves NGX’s Trading Licence Holders’ Rules



The Securities and Exchange Commission (SEC) has approved trading licence holders’ rules to enable entities that are not dealing members to participate in the Nigerian capital market by granting them access to the Exchange’s trading facilities through dealing members trading License holders.

Explaining how it works, NGX stated that, “the Exchange may at any time require a sponsoring trading license holder to provide information regarding its sponsored Access arrangementsThe sponsoring trading license holder shall inform the Exchange of any material change with respect to its sponsored access arrangements not later than 24 hours after discovery of the occurrence of such a change.

“Every sponsoring trading license holder that enters into an arrangement with a sponsored participant to provide sponsored access shall do so through a sponsored access system. A sponsoring trading license holder may provide access to multiple Sponsored Participants.”

According to NGX, a sponsoring trading license holder that provides sponsored access shall be responsible for all trading conducted by the sponsored participant pursuant to the sponsored access arrangement to the same extent as if the sponsoring trading license holder directly conducted such trading and shall be responsible for ensuring regulatory returns of all trades carried out by the sponsored participant.

“The sponsoring trading license holder shall have the same liability for orders, which are placed by a sponsored participant pursuant to a sponsored access arrangement as well as for orders which the sponsoring trading license holder places in any other manner; and the sponsoring trading license holder shall be liable for any and all actions taken using its electronic connections to the Exchange’s trading system, regardless of whether such actions are taken by an authorised representative of the sponsoring trading license holder, the sponsored participant or any other party.”

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