NIGERIA Law and Practice Contributed by: Fred Onuobia, Michelle Chikezie, Chima Uzochukwu-Obi and Anita Ebbi, G Elias
5. Enforcement Trends 5.1 Regulator Priorities and Enforcement Trends During the past year, there have been no notable enforcement activities and trends in Nigeria’s deriva - tives market. This might be because the market is still in the early stage of its development and there is close co-operation between the participants, the exchanges and the regulators to ensure that the market operates in a transparent, efficient and orderly manner. That is not to say that there have been no infractions committed by participants ‒ only that such infractions are either not particularly significant or the details thereof are not publicly available. It is worth noting, however, that exchanges in Nigeria such as FMDQ closely monitor trades on their platforms to ensure compliance with their trading rules and consequently assume enforcement roles where applicable. The SEC exercises significant discretion in determin - ing the areas of priority for examination and surveil - lance in the financial market. The SEC may choose to outline its examination priorities or make its observa - tions on surveillance and compliance issues public, but it has no obligation to do so.
default procedures, operational efficiency, legal and regulatory compliance, and risk management. Nego - tiations often focus on determining acceptable margin calculation methodologies, streamlining confirmation processes, ensuring compliance with applicable laws and regulations, and addressing risk mitigation strate - gies. 4.3 Opinions and Other Documentation Issues In Nigeria, there is generally no statutory or regulatory requirement that a legal opinion be provided in respect of trading agreements. However, it is usual for par - ties to a trading agreement to request legal opinions on trading agreements and the transactions entered into under these agreements. As a result, clients most often require opinions to be provided when they enter into swap or forward transactions documented under the ISDA Master Agreement and its relevant annex - es. Clients also require opinions when entering into repurchase agreements under GMRAs or a securi - ties lending transaction under the GMSLA, as well as other transactions documented under other trading agreements. These legal opinions usually address a broad range of matters ranging from the validity of the agreements (which involve Nigerian counterparties) under the laws of Nigeria to the enforceability of collateral or security arrangements under these trading contracts. Opin - ions are also provided on specific questions asked by clients, including questions concerning recharac - terisation risks and counterparties’ netting of payment obligations.
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