Nigeria’s Central Securities Clearing System (CSCS) is looking to boost market liquidity through its securities lending and borrowing (SLB) and post-trade allocation process flows to capital market operators.
The SLB arrangement would enable market participants to lend securities from a registered securities lending agent (SLA), according to Joseph Mekiliuwa, general manager of operations for CSCS.
The arrangement is aimed at custodian banks and their brokers and will help market participants to go short by selling securities that they do not have and lending from the SLA to cover their short position before the settlement date.
CSCS broke the news at a presentation hosted in Lagos last week.
For transfers that are required by a borrower to settle short sale transactions the SLA and borrower would have to complete the transfer request latest by midday, two days before settlement (SD–2) to allow CSCS deliver the shares into the borrower’s account a day to settlement (SD-1), according to CSCS.
CSCS also specified that it wouldn’t allow shares to be lent on behalf of the owner of the shares either from a segregated or omnibus account without a securities lending authorisation agreement.
