The Securities and Exchange Commission (SEC) may have appointed First Bank of Nigeria as a securities lending agent for equities and bond transactions on the Nigerian Stock Exchange (NSE).
An official of SEC, who preferred anonymity, told the News Agency of Nigeria (NAN) on Monday in Lagos that the appointment was to strengthen market making activities on the nation’s bourse.
The source said that apart from First Bank, one other bank was still being considered.
He said that the bank could not be appointed immediately due to some issues which needed to be addressed.
NAN reports that with the appointment, First Bank has joined UBA and Stanbic IBTC as lending agents on the NSE.
SEC, in August, 2012, appointed UBA and Stanbic IBTC as securities lending agents.
Securities lending is the act of loaning stocks, derivatives or other securities to an investor or firm.
The borrower (investor) is only required to put up collateral, either in cash, security or a letter of credit to obtain the facility.
The NSE in April, 2012 approved 10 stock broking firms out of the 20 firms that applied as market makers.
The firms are Stanbic IBTC, Renaissance Capital, Future View Securities, Vetiva Capital and ESS/DunnLoren Merrifield.
Others are WSTC, Capital Bancorp, FBN Securities, Greenwich Securities and CSL Stockbrokers.
Market making activities on the nation’s bourse commenced in September, 2012.