FMDQ Securities Exchange Plc., Monday, said the operationalisation of its wholly owned central securities depository (CSD), is poised to enhance efficiency in the nation’s financial market.
The depository according to FMDQ will empower investors and issuers with choice of depositories, as well as provide seamless and innovative services designed to meet needs.
A statement from the Securities Exchange made available to business a.m, said the FMDQ depository is specifically positioned to reduce principal risks in the nation’s financial markets significantly. It said this will be done by linking securities and cash in a way that enhances delivery versus payment, thus facilitating seamless settlement finality.
The FMDQ also noted that its depository commenced leveraging on strategic partnerships and alliances formed by the FMDQ entities, whilst engaging its critical stakeholders, including regulators and market participants, across the value chain, on its operational readiness to implement value-added product and service offerings.
“These engagements with stakeholders have culminated in the progressive support of the Central Bank of Nigeria (CBN), which has taken the lead in upgrading relevant guidelines-starting with the 2009 Guidelines on the Issuance and Treatment of Bankers’ Acceptances and Commercial Papers, which was revised ten years after on September 11, 2019,” the Exchange noted.
The revised guidelines is to ensure that market stakeholders have a choice of Nigerian depositories, thereby further enhancing market efficiency in the markets, the statement explained.
According to the FMDQ, it is envisaged that the SEC, following its registration of the Depository, is also taking steps to upgrade its regulations to reflect the existence of another depository in the capital market landscape.
These changes, the FMDQ said will facilitate the interoperability
between the two depositories in the country, thereby optimising freedom of choice and integrity of depository services, making our financial markets globally competitive and operationally excellent.
Bola Onadele Koko, the managing director/chief executive officer of FMDQ Exchange, was in the statement, quoted to have said: “With an overarching objective of making the Nigerian financial market globally competitive,
operationally excellent, liquid and diverse, FMDQ, in collaboration with its Members, regulators and other stakeholders, will continue to work hard to place Nigeria on the global financial market map despite the numerous challenges”.
The FMDQ added that the depository coupled with the custodial service it delivers is one of the key ingredients of developed global markets.
The full launch of the depository follows the operationalisation of FMDQ Clear Limited – Nigeria’s first central clearing house. It completes the value chain of pertinent market infrastructure for the pre-trade, trade and post-trade spectrums provided by FMDQ – from listing to trading, clearing, settlement and data, amongst other services.
The three SEC-registered FMDQ entities – FMDQ Exchange, FMDQ Clear and FMDQ Depository, make up Africa’s first vertically integrated financial market infrastructure group.
The Exchange said its group thus provides a one-stop platform for the seamless listing, trading, clearing, settlement and recording of financial market
transactions across the debt capital, equity capital, foreign exchange and derivatives markets.