Business

Zambia to adopt over-the-counter derivatives

NKOLE MULAMBIA, Ndola
THE Bonds and Derivatives Exchange (BADEx) plans to engage financial markets in Zambia this year to adopt the Group of Twenty (G20) commitment on over-the -counter derivatives (OTC) in line with international developments.
The G20 is an international forum for the governments and central bank governors from 20 major economies.
The G-20 pledges that all standardised OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest.
BaDEx chief executive officer Peter Sitamulaho said there is need for the country to accept and approve the commitment as it will bring substantial benefits to the growth of derivative markets.
Mr Sitamulaho cited transparency in the markets, mitigation of systemic risk and protection against market abuse as some of the benefits expected.
He however said that Zambia has made no progress in this regard.
“During phase two, we plan to engage financial markets in Zambia to adopt the G20 commitment on OTC derivatives in line with international developments in this area. Zambia has made no progress in this regard,” he said in an interview last week.
Mr Sitamulaho said there should be mandatory electronic trading of OTC derivative contracts on a licenced and regulated exchange by all financial and capital market players in Zambia.



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