FMDQ emerges Africa’s first vertically integrated financial market infrastructure group

…unveils new status, corporate identity …SEC, CBN instrumental to achievement

Today, world financial markets are increasingly moving towards integration, connecting erstwhile fragmented seg

ments and processes across the full value chain of the securities market.

Nigeria is not left behind, with recent events in 2018 – such as the feat of straight-through-processing for the settlement of fixed income trades achieved by the Central Bank of Nigeria (CBN), Financial Markets Dealers Association (FMDA) and FMDQ OTC Securities Exchange (FMDQ) in the fixed income market.

There were also the introduction of the first central clearing house in Nigeria, FMDQ Clear Limited (FMDQ Clear), a wholly-owned clearing and settlement subsidiary of FMDQ; the introduction of the FMDQ Dealing Member (Specialists) category, a new market for securities dealing houses (stockbrokers) to trade fixed income with banks, amongst others, all geared towards boosting productivity of market participants and fostering

efficiency, cost effectiveness and transparency in the markets.

Following an eventful year, 2019 has ushered in its own share of commendable market-impacting initiatives.

Having obtained the approval of the apex Nigerian capital market regulator, the Securities and Exchange Commission (SEC or the Commission), for the amendment of the registration of FMDQ OTC PLC from ‘an OTC Market’ to a fullfledged ‘Securities Exchange’ in March 2019, the company has also since secured the necessary approvals for a name change to ‘FMDQ Securities Exchange PLC’ (FMDQ Exchange) effective immediately, thereby aligning its name to its upgraded status in the capital market.

Furthermore, in June 2019, the Exchange received the SEC registration of its wholly-owned central securities depository subsidiary – FMDQ Depository Limited – positioned to provide collateral caching, custodian and settlement services with excellent operational capabilities tailored to provide value to its stakeholders, and completing the value chain of pertinent market infrastructure in the Nigerian financial markets, particularly the post trade spectrum, following the operationalisation of FMDQ Clear Limited.

The implications are farreaching as the careful implementation of the FMDQ Entities – FMDQ Exchange, FMDQ Clear and FMDQ Depository – have not only created robust linkages between hitherto fragmented spheres of the markets, but also presented the market with an efficient, innovative and integrated financial market infrastructure (FMI) Group for the seamless execution, clearing and settlement of financial markets transactions.

The erstwhile OTC Exchange commenced operations in November 2013, following its launch as an OTC market, primarily to organise the inter-bank market with focus on the fixed income, currency and derivative markets, and as a self-regulatory organisation, providing a worldclass governance structure for the markets within its purview.

In view of this, FMDQ Exchange set out to transform the markets, in line with its agenda to make the markets globally competitive, operationally excellent, liquid and diverse; commonly known by market participants as FMDQ’S GOLD Agenda.

Following continued collaboration with its varied stakeholders, including regulators and market participants, a resilient product and market development architecture, and a commitment to operational excellence, FMDQ Exchange has positively evolved despite market challenges and economic headwinds.

Attaining its first lustrum in November 2018, and closing the year with a market turnover of N182.86 trillion (from N103.57 trillion in 2014), FMDQ Exchange has assumed an expanded role beyond being a market organiser, to also becoming adviser to governments and regulators, catalyst for infrastructure capital and financial markets diplomat, aligning the domestic markets with its international counterparts and essentially, showcasing the potential of the Nigerian financial markets to the international community.

Having set the pace in the fixed income, currency and derivatives markets, FMDQ Exchange, as a full-fledged securities exchange, will position itself to cover new markets - equities and commodities - in the near- to mid-term.

Speaking to Businessday Media on this ground-breaking development, the Managing Director/chief Executive Officer of FMDQ Exchange, Bola Onadele. Koko, stated that, “the development of the Exchange over the last five (5) years is reflective of the progressive and dedicated strategic leadership provided by its Board of Directors, as well as the Company’s ever-intensifying commitment to proactively deliver value to its stakeholders. Having successfully consolidated past gains and taken on new frontiers through the operationalisation of a budding integrated FMI Group across the full value chain of the securities market – execute, clear and settle – the Group is poised to enhance efficiencies in FMDQ’S markets to the benefit of market participants”.

According to Koko, as he is popularly referred to in the financial market, it is in view of the resolute affirmation of the FMDQ Entities to influence and promote sustainable development in the Nigerian financial market, one which is in alignment with global standards, that a new identity is being unveiled today. The new FMDQ Logo, whilst maintaining its vibrant colours – deep blue, depicting trust, confidence, depth and stability; bright gold, showing off passion, value, prestige, quality and prosperity; and a touch of cool grey, representing conservativeness, professionalism and sophistication, also reflects FMDQ’S drive to “consistently move forward” and replaces the individual identities of FMDQ Exchange and its wholly owned subsidiaries. •Continues online at www.businessday.ng