The Capital Markets Solicitors Association of Nigeria (CMSA) says it will hold the first Nigerian Structured Products Summit that will deal with derivatives challenges on Feb. 21 and Feb. 22 in Lagos.
The information is in a statement by CMSA’s Secretary, Ben Obidegwu, on Friday in Lagos.
He stated that the summit would be held in partnership with the American Bar Association Task Force on Financial Engineering for Economic Development (FEED) and the International Swaps and Derivatives Association (ISDA).
A structured product is a pre-packaged investment strategy based on derivatives, such as a single security, basket of securities, options, indices, commodities, debt issuance or foreign currencies.
The derivative itself is a contract between two or more parties based on asset or assets. Its value is determined by fluctuations in the underlying asset.
The most common underlying asset include stocks, bonds, commodities, currencies, interest rates and market indexes.
Obidegwu stated that the initiative would ensure that terms of financial contracts were enforced, while collateral arrangements to attract Nigerian markets to local and foreign investors were clarified and positioned accordingly.
He explained that the summit would also build an understanding of the role of more efficient financial solutions in risk management.
He said “we specifically expect the summit to cover market participation and foster stronger regulatory frameworks to deepen the market.
“We recognise that the Nigerian exchange and Over-The-Counter (OTC) derivatives market is poised for significant growth.
“Nigeria has increasingly become a focus of market participants around the globe. The market has enormous potential, both from international and domestic perspective.
“The summit will foster these at the highest standard, with important regulators, industry leaders and members of the private sector attending to support the initiatives.”
The CMSA scribe added that the summit would feature high-profile domestic and international capital markets and regulatory experts from Nigeria, Africa, Europe and the U.S.
Yinka Edu, the CMSA Chairman, said the summit was necessary because many domestic and international clients used structured products.
He said “two exchanges in Nigeria, the Nigerian Stock Exchange and FMDQ OTC Securities Exchange, have announced plans to launch markets for listed derivatives.
“We believe these products have enormous upside in terms of reducing risk and improving the stability of the investing environment.”
