Nigeria’s premier central counterparty, NG Clearing Limited, on Tuesday January 19, 2021, announced that it has signed an agreement with a leading software development firm, Mantissa Infotech Private Limited, for the development, implementation and maintenance of bespoke clearing and settlement technology for its operations.
This coming barely, five months after it received approval in principle from the Securities and Exchange Commission (SEC) last year, to clear and settle exchange traded derivatives instruments.
Speaking on the development, the company’s Managing Director & Chief Executive Officer, Mr. Tapas Das, said: “We are very excited about this deal, as the deployment of the technology platform puts us in a position to commence operations as soon as we receive final approval from the SEC. The technology platform will support the clearing and settlement of derivative instruments across various asset classes i.e., futures and options contracts on indices, equity shares, commodities, currency, rates etc.
He explained that Mantissa’s vast experience and end-to-end capability in providing a suite of bespoke technology solutions to leading exchanges and clearing houses in India comes in very handy, having provided both the trading and the clearing & settlement software for 14 years to the National Multi-Commodity Exchange of India Limited (NMCEIL), which was the first national level commodity exchange in India, until NMCEIL was merged with Indian Commodity Exchange Limited (ICEX) in 2018.
Pointing out that Mantissa’s broad experience from providing its technology service to various market infrastructure, including NMCEIL, Metropolitan Stock Exchange of India Limited (MSE), Metropolitan Clearing Corporation of India Limited (MCCIL) and ICEX, has been beneficial in the development of the state of the art technology and we expect that our stakeholders will find the technology very versatile and useful.”
NG Clearing Limited is promoted by The Nigerian Stock Exchange and Central Securities Clearing System Plc along with key stakeholders like the Nigeria Sovereign Investment Authority, Access Bank Plc, Consonance Kuramo Special Opportunities, Coronation Merchant Bank Limited, Greenwich Merchant Bank Limited, Union Bank of Nigeria Plc, United Bank for Africa Plc and Association of Securities Dealing Houses in Nigeria.
NG Clearing was established to support growth and development in the Nigerian Capital Market, as the gateway to African Markets. We deliver best-in-class post-trade services that manage counterparty credit risks and reduce systemic risks, by guaranteeing the settlement of trades.
Our quest is to pave the way for a smooth introduction of exchange-traded derivatives and other financial instruments to the Nigerian and African markets, thus, facilitating the availability of alternative investment options for knowledgeable local and foreign investors who seek a diversified portfolio within our markets.
NG Clearing has operational resources in place to ensure that it can continue to operate at all times necessary to support the functioning of the markets that we support and the settlement of the contracts effected on those markets.
The company will deploy a competitive low-cost clearing fee regime for members, and provide members access to a wide range of financial reports, that equip them with extensive knowledge and enable them to make informed decisions.
We will optimize the deployment of our resources to achieve long-term value creation for our stakeholders using a state-of-the-art risk management framework, which complies with global best practices for mitigating settlement risk.
We have sufficient financial resources, including a settlement guarantee fund, to cover participants’ risk exposures, and our risk-based additional collateral requirement will ensure that capital deployed by clearing members is always optimal.