Sanusi urges FMDQ OTC to strengthen financial markets

 

The Governor, Central Bank of Nigeria, Mr. Lamido Sanusi

The Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, on Thursday urged the management and staff of FMDQ OTC Plc to strive towards restructuring and strengthening the capital market as the self-regulatory organisation commences operations in earnest.

He said this while delivering a keynote address at the inauguration of the platform.

Licensed by the Securities and Exchange Commission in 2012 to function as an Over-the-Counter market, the FMDQ OTC is owned by 25 banks, the Central Bank of Nigeria, Finance Dealers Association and the Nigerian Stock Exchange.

The platform is also expected to enhance financial securities transactions outside of the official window under the regulatory purview.

Sanusi, who said the inauguration of the FMDQ platform was in line with other CBN reform initiatives aimed at developing the nation’s financial markets, stressed that the central bank had huge expectations of the FMDQ to further restructure and give depth to the Nigerian financial markets.

He said, “FMDQ is expected to complement existing securities exchanges and provide the governments, issuers and investors, both globally and domestically, with world class market governance for capital transfers.”

The CBN governor, who stressed that the FGN bond market must remain liquid and effective to establish a credible risk-free yield curve, explained that the platform was expected to deepen market liquidity, among other things.

He said, “This is expected to bring about increased liquidity in the instruments of unlisted securities, increased attraction and flow of resources to small and medium-sized enterprises, price discovery and enhanced financial inclusion potentials, among others.”

He, however, said that for the platform to achieve its objectives, there was the need for some of the key issues facing OTC derivatives – such as absence of standard products and accounting treatment – to be addressed.

The Director-General, SEC, Ms. Arunma Oteh, expressed delight at the inauguration, especially as the platform is expected to give the bond market a boost.

Oteh, while commending the management of the company for the achievement, said the inauguration of the platform as well as the earlier inauguration of NASD OTC Plc, was a proof that the capital market was being positioned to broaden the country’s economic horizon.

 “It is very important that we continue to take our place in the comity of nations,” she said.

The Director-General, Debt Management Office, Dr. Abraham Nwankwo, said the inauguration of FMDQ OTC was an important step towards aligning the domestic financial sector with the global financial sector.

He commended the CBN, SEC and other stakeholders, particularly the Financial Market Dealers Association and the Bankers’ Committee, for the role they played in making the emergence of the company possible and gave the assurance that the DMO would remain a major stakeholder in the enterprise.

Highlighting the importance of the platform, the Chairman, FMDQ OTC, Mr. Aigboje Aig-Imoukuede, explained that the decision to establish the platform was informed by the recent global and local financial crises, which he said were a painful reminder of the critical role the financial markets play in the development and sustenance of the nation’s economy.