The Nigerian debt capital market is set to witness a boost following the transformation of the FMDQ OTC Securities Exchange to a full-fledged securities exchange from an over-the-counter (OTC) market.
Financial market operators, analysts and other stakeholders said that given the performance of the FMDQ in deepening the DCM in the last five years, more funds and liquidity would be created going forward.
According to a market operator, Mr. Ayo Oguntayo, the coming on board of FMDQ had encouraged more debt raising because investors increased demand for the securities realizing the fact that there is platform to efficiently trade those securities.
“The transparency and orderliness FMDQ has brought to the fixed income securities market generally is overwhelmingly commendable. I am very positive that transforming into a full-fledged securities exchange would further enhance its capacity and capabilities to deepen the market for the long-term funding that the economy so much needs at the moment,” Oguntayo said.
FMDQ 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 world-class governance structure for the markets within its purview.
However, after the necessary approval from the Securities Exchange Commission (SEC), FMDQ last week announced a name change by removing OTC to reflect its new status.
FMDQ had also in June 2019 received the SEC registration of its wholly owned central securities depository subsidiary – FMDQ Depository Limited.
According to FMDQ, the subsidiary is 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.
It explained that 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.
Commenting, the Managing Director/Chief Executive Officer of FMDQ Exchange, Mr. Bola Onadele. Koko, stated that: “The development of the exchange over the last five 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,” he said.
According to him, 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.