FMDQ Clear, a subsidiary of the FMDQ Group and Nigeria’s premier counterparty, has been granted Approval-In-Principle by the Security and Exchange Commission (SEC) for Central Counterparty Registration.
This disclosure was made by the FMDQ Group through a statement in a series of tweet posts on its official Twitter handle on Wednesday, September 30, 2020.
This groundbreaking and game-changing milestone will help redefine the landscape for financial transactions and introduce endless possibilities of permissible products that can be developed and deployed within the ecosystem towards delivering long-standing prosperity for the Nigerian economy.
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The statement from FMDQ reads, “FMDQ Clear, Nigeria’s first Central Clearing House, landmarks as Nigeria’s Premier Counterparty, as the Security and Exchange Commission grants Approval-In-Principle for Central Counterparty Registration.”
It states that this game-changing milestone is to usher in the actualization of strategic initiatives that will enable the development of thriving repurchase agreements, derivatives and commodities market in Nigeria like other developed economies and markets.
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Going further, it also pointed out that as a critical Financial Market Infrastructure, FMDQ Clear, as a Central Counterparty, will de-risk the market by interposing itself between counterparties, becoming the buyer to every seller and seller to every buyer, thereby aggregating and consolidating counterparty risk.
The regulatory environment for the establishment of central counterparty was set with the publishing of the robust and world-class rules on central counterparty in December 2019 after having actively engaged with market participants for several years on them.
READ: NG Clearing gets SEC’s approval to launch Central Counterparty Clearing House
A central clearing counterparty, also known as central counterparty (CCP), is referred to as a financial institution that takes on counterparty credit risk between parties to a transaction and provides clearing and settlement service for trades in foreign exchange, securities, options and derivative contracts. CCPs are highly regulated institutions that specialize in managing counterparty credit risk.
Just in!!! FMDQ Clear Landmarks as Nigeria's Premier Central Counterparty following the approval-in-principle of the @SECNigeria. pic.twitter.com/s9WabCEzQs
— FMDQ Group (@FMDQGroup) September 30, 2020