FMDQ Securities Exchange Breaks NSE’s Monopoly
At last, the monopoly enjoyed by the Nigerian Stock Exchange as a platform to trade securities in Nigeria has been broken. Investors now have a formidable alternative in FMDQ Securities Exchange Plc, which recently transited from just an over-the-counter (OTC) platform to a full-blown securities exchange, representing a paradigm shift in the Nigerian capital market. According to a statement by FMDQ, the Securities and Exchange Commission(SEC) has granted it necessary approvals to operate as a securities exchange and it has therefore established FMDQ Clear Limited and FMDQ Depository—its two wholly-owned subsidiaries.
An attempt was made some 19 years ago to establish an alternative platform to the Nigerian Stock Exchange (NSE), where securities and other financial instruments would be traded, but that dream did not see the light of the day as the proposed Abuja Stock Exchange (ASE) failed to thrive. The then chairman of the ASE Steering Committee, Dr. Shamsudeen Usman, had explained that the planned establishment of ASE was in order to give the investing public and other stakeholders in the capital market another choice and to encourage innovative market creation and develop
ment strategies. Usman who was a deputy governor with the CBN at the time also pointed out that the main objective of founding the Abuja Stock Exchange had never been to replace the existing stock exchange, but to provide “the much-needed competition to better the lot of the Nigerian investor.” He, however, could not achieve that lofty dream due to what persons close to the deal described as power play between the then head of the NSE, Dr. Ndi Okereke Onyiuke and the promoters of the ASE. What Usman and other promoters of the ASE could not achieve in about two decades ago, was done a team led by Mr. Bola Onadele.Koko, managing director of the erstwhile FMDQ OTC Exchange Plc in partnership with his board of directors, who successfully changed the status of the company to FMDQ Securities Exchange Plc. The new status enables the company, which is now a full fledge securities exchange to trade in all securities including fixed income, equities, derivatives, commodities and foreign exchange. The transition of FMDQ from an over-thecounter (OTC) platform to a full-blown securities exchange, according to financial experts, represents a paradigm shift in the Nigerian capital market. It ends the unwritten mono-stock exchange policy and opens up the capital market to intense competition. Of course, the transition could not have sailed through without the permission of the Securities and Exchange Commission (SEC). “We are pleased to inform you of our Company’s transition from an OTC Market to a full-fledged Securities Exchange, having received the necessary approvals from the apex regulator of the Nigerian capital market, the Securities and Exchange Commission (SEC or the Commission). Consequently, the erstwhile FMDQ OTC PLC, also previously known as FMDQ OTC Securities Exchange, has now changed its name to FMDQ Securities Exchange PLC (FMDQ Exchange or the Exchange),” a statement from FMDQ Securities Exchange Plc disclosed. Sources within The Exchange revealed that SEC approved the amendment of the registration of FMDQ OTC Plc from ‘an