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Stakeholders Seek Effective Regulation of Commodity Exchanges

Capital market operators under the aegis of the Chartered Institute of Stockbrokers (CIS), Association of Stockbroking Houses of Nigeria (ASHON) and Association of Issuing Houses of Nigeria (AIHN) have indicated readiness to work with the federal government in ensuring the establishment of viable community exchanges.
Speaking Tuesday, at the ‘Press Conference of G 29 under the aegis of CIS, ASHON and AIHN’, the President, Chartered Institute of Stockbrokers’ (CIS) Albert Okumagba said, “the core capital market operators would work with the regulators to come up with a pragmatic timetable which will be endorsed by the federal government for commencement of viable commodity exchanges which are either privately owned or government owned.”
A commodities exchange is where various commodities and derivatives products are traded.
He added that the commodity market should be developed in such a way that will provide underlying instruments on which other structured products in the financial market can be developed, to increase the number of tradable instruments in the capital market, such as instance futures; options and other derivative instruments on the underlying assets available in the commodity.
Speaking further, the chairman of ASHON, Mr. Emeka Madubuike said policies that would promote marketablity of agriculture products should be enunciated and implemented to boost operations of the commodities exchanges.
According to Maduike, incentives should be given to listed companies and prospective companies to be listed so as to have some advantage over unlisted companies, saying “we propose some tax incentives for listed companies and those that are in the process of getting listed.”
“At present, the Nigerian capital market is underutilised relative to its absorptive capacity. Therefore, the federal government’s goal of diversification of the economy would be reinforced if the capital market is deepened to enable it fund the capital expenditure over the short to medium term period.
“We the coalition of capital market operators under the aegis of the capital market alliance are fully prepared to work with the capital market regulators to enable the government reposition the market as a nexus for bridging infrastructural gaps. This is a major path towards Nigeria’s dream of being on the league of top 20 economies in 2020,” he said.

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