The long-awaited FMDQ ETD market, which is geared towards
transforming risk to certainty, in an unprecedented move, brings about the
integration of the banking sector and capital market in Nigeria. Driven by FMDQ
Securities Exchange Limited (FMDQ Exchange or the Exchange), Nigeria’s largest
Exchange by Turnover, in collaboration with FMDQ Clear Limited (FMDQ Clear or
the Central Counterparty ([CCP]), Nigeria’s foremost CCP, the FMDQ ETD Market,
boasts of participation from ten (10) pioneer Deposit Money Banks and five (5)
pioneer non-bank financial institutions, all positioned to change the landscape
of the Nigerian financial markets in the near-to-medium term.
With the CCP’s extensive risk management structures and
robust financial resources – c. $20mm in FMDQ Clear’s proprietary Default
Resolution Reserve, and over $12mm from Members’ contributions to the CCP’s
default waterfall – the players will be able to leverage the financial capacity
of the very big players in a market structure that transfers counterparty risks
to a credible world-class CCP, FMDQ Clear.
In support of the ETD Market, the three (3) pioneer General
Clearing Members (GCMs) – Access Bank PLC, Zenith Bank PLC, and Stanbic IBTC
Bank PLC – who are capable of clearing transactions for their proprietary
positions and those of other Trading Members and clients, will share mutualised
responsibility as Members of the CCP, and clear their proprietary positions, as
well as twelve (12) Derivatives Trading Members, bringing the pioneer Trading
Members in the ETD Market to fifteen (15) – Meristem Stockbrokers Limited,
CardinalStone Securities Limited, Chapel Hill Denham Securities Limited,
Coronation Merchant Bank Limited, Union Bank of Nigeria PLC, Parthian
Securities Limited, DLM Securities Limited, FBNQuest Merchant Bank Limited,
First City Monument Bank Limited, Fidelity Bank PLC, FSDH Merchant Bank
Limited, Greenwich Merchant Bank Limited, Access Bank PLC, Zenith Bank PLC and
Stanbic IBTC Bank PLC.
The ETD Market goes live with two (2) pioneer products – the
FGN Bond Futures and USD-NGN Non- Deliverable FX Futures – which will be traded
and cleared on world-class FMDQ ETD systems, the FMDQ Q-ex Trading System and
FMDQ Q-ex Clearing System, respectively.
The development of this ETD Market in Nigeria has long been
a topic of interest amongst capital market operators, regulators, and market
participants, as the Market directly plays a vital role in financial system
stability and greatly contributes to various aspects of the economy as a whole.
Leveraging on its aspiration to transform the Nigerian financial markets to be
globally competitive, operationally excellent, liquid, and diverse, in line
with the FMDQ ‘GOLD’ Agenda, the pre-eminence of the FMDQ ETD Market cannot be
overemphasised as it ushers the actualisation of the panacea that will enable
the development of a thriving financial sector, like other developed economies,
positioning it for revolutionary growth in potentially colossal proportions.
The visionary pioneer Members of this FMDQ ETD Market, who
have positioned themselves to take advantage of the emerging novel segment of
the financial markets, must be commended for their instrumental role in driving
the activation of this Market and the broader Nigerian financial markets. These
pioneer Members have demonstrated their commitment as catalysts in fostering
sustained growth and development in the Country’s financial landscape.
FMDQ Group is Africa’s first vertically integrated financial
market infrastructure (FMI) group, strategically positioned to provide
registration, listing, quotation and noting services; integrated trading,
clearing & central counterparty, settlement, and risk management for
financial market transactions; depository of securities, as well as data and
information services, across the debt capital, foreign exchange, equity and
derivatives markets, through its wholly owned subsidiaries – FMDQ Exchange,
FMDQ Clear, FMDQ Depository Limited and FMDQ Private Markets Limited. As a
sustainability-focused FMI group, FMDQ Group, through FMDQ Exchange, operates
Africa’s premier Green Exchange – FMDQ Green Exchange – positioned to lead the
transition towards a sustainable future.