The Nigerian financial markets recorded another significant milestone, as FMDQ Securities Exchange Limited and FMDQ Clear Limited, went live with the introduction of the dynamic FMDQ Exchange-Traded Derivatives (ETD) Market,
The ETD Market was live with two 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 ETD makes it possible for market stakeholders – corporates, foreign & domestic investors and Pension Fund Administrators – to hedge inherent financial market risks in their operational and investment activities.
It also provides an opportunity to convert risk to financial security, which in turn will help attract capital flows, reduce cost of capital, promote market liquidity, and ultimately deepen the Nigerian financial markets, the Exchange said in a statement.
This is geared towards transforming risk to certainty, in an unprecedented move, brings about the integration of the banking sector and capital market in Nigeria, it added.
The FMDQ ETD Market boasts of participation from 10 pioneer deposit money banks and five pioneer non-bank financial institutions, all positioned to change the landscape of the Nigerian financial markets in the near-to-medium term.
The development of this ETD Market in Nigeria directly plays a vital role in financial system stability and greatly contributes to various aspects of the economy as a whole.
ETD provides an opportunity to convert risk to financial security, which in turn will help attract capital flows, reduce cost of capital, promote market liquidity, and ultimately deepen the Nigerian financial markets.
