On-going Transactions

NIGERIA COMMODITY EXCHANGE (NCX)

BACKGROUND

The Nigeria Commodity Exchange (NCX) was originally incorporated as a Stock Exchange on June 17, 1998.

o   It commenced electronic trading in securities in May 2001 and was converted to a commodity Exchange on August 8, 2001 and brought under the supervision of the Federal Ministry of Commerce.

o   The conversion was premised on the need for an alternative institutional arrangement that would manage the effect of price fluctuations in the marketing of agricultural produce which has adversely affected the earnings of farmers since the abolishment of commodity Boards in 1986.

o   The Exchange will be of immense benefits to farmers, agro-commodity processors and merchants, as it will serve as a veritable platform for them to mitigate the inherent risks in agricultural production and marketing.

STATUS

The ownership and management of the Exchange are completely separated from the right of a trading member to trade on the Exchange.

o   The Exchange has a Board of Directors, which determines policy matters of the Exchange as a company.

o    Market decisions relating to operations are delegated by the Board to the Council, which includes representatives of the promoting institutions, members of the Exchange, commodity associations warehouse operators/collateral managers, clearing banks and other financial institutions.

o   The Council of the Exchange shall operate through four standing Committees; Membership and Finance Committee, Trading Committee, Clearing House Committee and Arbitration and Vigilance Committee.

All the committees shall  have established rules and regulations governing their operations and shall meet from time to time on cases relating to each of them and make recommendations to Council for consideration and approval.

PROSPECTS

As part of efforts to promote the production and supply of commodity-based industrial raw materials for use by local manufacturers in the country, the Raw Materials Research and Development Council (RMRDC) is set to open a partnership with the Nigeria Commodity Exchange (NCX) for improved synergy between producers and marketers of agricultural and mineral commodities to boost local manufacturing NCX has commissioned 12 delivery warehouses with a combined capacity of more than 26,000 MT located in different geo-political zones across the country for the provision of state-of-the-art storage and quality assurance services.