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The Central Bank of Nigeria (CBN) on Friday mandated deposit money banks to pledge collateral of N1 billion worth of government/CBN securities for OTC trading settlement.
The directive which takes effect from June 1, 2018, is part of CBN’s efforts to enhance efficiency in trading and post-trade activities and build confidence in the financial markets.
In a circular signed by Alvan Ikoku, director, financial markets, the pledge requirement is mandatory for all DMBs that wish to participate in the OTC trade settlement.
“Lack of the provision of the pledge or failure to top-up a pledge when required will result in exclusion for the market”, the circular reads.
HOPE MOSES-ASHIKE
