Securities and Exchange Commission (SEC) has registered FMDQ Clear Limited, a central clearing house promoted by the FMDQ OTC Securities Exchange.
In a statement, FMDQ stated that the clearing house will deliver highly efficient post-trade services across Nigeria’s fixed income and derivatives markets, addressing some of the key drivers for the development of the markets.
The clearing house will ensure risk mitigation, capital efficiency, price transparency, safety, stability, confidence and inclusiveness in the marketplace.
According to FMDQ, FMDQ Clear has commenced initiatives to ensure that its risk management activities underpin its effectiveness, reliability and long-term sustainability, as it strives to resolve key clearing and settlement issues.
FMDQ Clear has also formally partnered with Frontclear, which provides third-party settlement guarantee funds (SGFs), to further strengthen the clearing house risk waterfall framework, with a third-party settlement guarantee arrangement that improves on settlement finality, a first of such infrastructure in Africa.
“The establishment of this clearing infrastructure, FMDQ Clear, will greatly contribute to making the Nigerian inter-bank market globally competitive, operationally excellent, liquid and diverse, in line with FMDQ’s GOLD Agenda for the transformation of the Nigerian financial markets, as participating clearing and dealing members will have expanded access and in turn, be better able to serve the needs of their client base and the real economy,” FMDQ stated.