FMDQ Clear Limited has been given operational approval by the Securities and Exchange Commission (SEC).
The company will be the first clearing house in Nigeria, and a subsidiary of FMDQ OTC Securities Exchange which is a big player in debt capital, currencies/derivatives as well as OTC exchanges.
The new company, which is a clearing house, has been positioned to offer efficient post-trade services in the markets, its promoters have stated.
FMDQ Clear is also expected to mitigate risks, ensure price transparency, overall safety, and investor confidence. In the same vein, it will ensure capital efficiency as well as an inclusive market.
“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
The Nation reports that the company has already undertaken certain initiatives that will ensure sustainability among other things, even as it works towards resolving “key clearing and settlement issues”
The company will also be partnering with third-party companies to, among other things, ensure a strong risk waterfall framework. One of such companies is Frontclear, which provides settlement guarantee funds. The partnership is said to be the first of its kind in Africa which will lead to improvement in the area of settlement finality.
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