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CDX to ‘facilitate’ derivatives

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SECC director-general Sou Socheat said the accreditation will allow CDX to conduct industry-specific training programmes at the SECC’s discretion. Photo supplied

CDX to ‘facilitate’ derivatives

Cambodian Derivatives Exchange Co Ltd (CDX) has been accredited by the Securities and Exchange Commission of Cambodia (SECC) as a “facilitator for the online arrangement” of two of its programmes.

With CDX’s hand in the “Training for Approved Person for Derivative Business” and “Continuous Professional Education Program”, the SECC aims to make the Kingdom’s budding derivatives market more attractive, professional and internationally recognised.

Derivatives are financial contracts between two parties based on the future price fluctuations of an underlying asset, such as a commodity, currency or stock.

The financial tool offers investors a chance to speculate on the asset’s price movements, or protect their investment against unwanted risk.

SECC director-general Sou Socheat told The Post on Thursday that the accreditation will allow CDX to conduct industry-specific training programmes at the discretion of the SECC.

CDX received its derivatives broker licence in 2016 and continues to work closely with the SECC.

Socheat said: “We have been working with them on the derivatives market to better educate the public on investing in products.

“We’ve just authorised the CDX to provide training pertaining to the industry. They have to seek approval from the SECC on the specific topic they wish to cover.

“The needs of investors and other individuals who seek to learn more about derivatives trading must form the basis for the training design.

“At the same time, CDX has a lot networks abroad that they can bring to invest here. That’s why we need to work together – to guide on how to interpret the rules and regulations of our market,” he said.

The trading volume of derivatives in Cambodia increased from $84 million in 2018 to $200 million last year, SECC data show. The derivatives market currently boasts five central counterparties, 27 derivative brokers, five fund management companies and five trustees.

Socheat said the SECC is willing to work not only with CDX, but other operators to improve the derivatives market and enhance its attractiveness.

He said: “Through collaboration, we want potential investors who have been through training to have a good grasp on the fundamentals of the market and its risks, given its volatile nature.

“Once they’ve been through training, they’ll be better equipped to manage these risks.”

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