FMDA Inaugurates Electronic Trading Community in Nigeria


Nigeria's foremost financial self-regulatory body, Financial Markets Dealers Association (FMDA), in collaboration with International Capital (ICAP) of South Africa has inaugurated the Inter-Dealer Brokerage Service (IDB), designed to accommodate voice and electronic trading in the Nigeria's financial market.

The inauguration in Lagos which was immediately followed by the signing of a Brokerage Service Agreement between the two parties, signaled the commencement of the Electronic Trading Community (ETC), a hybrid and electronically-driven platform that creates visibility and efficiency in the market.

ThisDay gathered that all the banks and discount houses in the country have keyed in to the system, with equipment and other infrastructure needed for effective operation, already installed. A six-week test-run and tests of the system have also commenced while live trading on the platform is expected to begin mid-June.

FMDA President, Akin Dawodu, in his speech, listed the benefits of the system to include improved transparency; real-time surveillance; global exposure for the Nigerian financial market; cost-effectiveness and achievement of international standards, maintaining that the ultimate beneficiary is the country.

Executive Secretary/Chief Executive, FMDA, Wale Abe, traced the relationship between his association and ICAP to the time a previous arrangement FMDA had with another organisation failed to yield expected results.

"ICAP came up with a proposal and presentation that met our needs. Issues of regulatory authorities were explored just as the regulatory authorities such as the CSCS, Debt Management Office (DMO) and Central Bank of Nigeria (CBN) were carried along. Tests were conducted and the initial focus was on Electronic Trading Platform but later Inter-Dealer Brokerage (IDB) service, which of course, is voluntary, was included," Abe explained.

Managing Director, CSCS, Egunjobi Peter Adebayo, who was also present at the occasion, hailed the introduction of the platform in Nigeria, describing it as a welcome development. He said since the money-market in the country has overtaken the equities market in terms of values, he hoped settlement would be enhanced under the system.

Director, ICAP African Brokers, Bob Jones-Davies, described the signing of the agreement as a momentous occasion, saying his organisation was impressed by the pace of development of Nigeria's money market. He added: "We are happy that the partnership has progressed to this level."

He explained that ETC offers enormous benefits and makes trading activities more efficient and transparent. "There is no need for physical presence, as traders could transact from remote locations. Also, it makes transactions easier to complete, monitor, and clear; it also gives the stock market immense global exposure, at the same time injecting increased liquidity which enhances the market's financial base," he stressed.

FMDA Vice President, Olufemi Owopetu, expressed happiness at the commencement of the service in the country, saying it will expose the market to global players who could link up and access the market from anywhere in the world. She disclosed that FMDA decided to partner ICAP because of its reputation as a global player.