FMDQ to Launch First Derivatives Product in Q1 2020

By Dipo Olowookere

The Associate Executive Director in charge of Capital Markets at the FMDQ Securities Exchange Plc, Ms Tumi Sekoni, has hinted that the agency would launch the first derivatives product before the end of first quarter of 2020.

Derivatives are products, instruments, or securities which are derived from another security, cash market, index, or another derivative.

They are one of the most widely traded instruments in financial world, with value of a derivative transaction derived from the value of its underlying asset e.g. bond, interest rate, commodity or other market variables such as currency exchange rate.

Speaking on Saturday with members of the media in Lagos, Ms Sekoni said preparations were in top gear to ensure the launch of the product, noting that the exchange would continue to meet the yearnings and aspirations of its stakeholders.

She informed the media executives that the exchange would continue to educate and enlighten investors and operators on its products and services.

Also addressing journalists at the media parley at the weekend, Managing Director of FMDQ Securities Exchange Plc, Mr Bola Onadele, explained that the conversion of the agency into a full blown securities exchange was not to compete with the Nigerian Stock Exchange (NSE) in equities trading but to create new entities for the future.

According to him, FMDQ would work with Small and Medium Enterprises (SMEs) and private companies to create new entities for the future.

Mr Onadele said the company’s intention was not going into the equities market to compete with the exchange or ask companies to delist.

He noted that the exchange was looking at how to create new entities for the future, work with and nurture SMEs and private companies in Nigeria that had no access to long-term financing.

“We are not playing the game of attacking the NSE that is not our role or our job or the way we do business.

“Rather we are looking at how to create new entities for the future, to work and nurture them, to work with SMEs, private companies in Nigeria who have not had access to long term financing.

“So, we are in the business of planning 20-30 years ahead and working with Nigerian entities in getting prosperity to Nigerians,” he said.

 The managing director stressed the need to position the nation’s capital market to become number one in terms of standards, governance and transparency, saying that the FMDQ would continue to work with government and regulators develop the Nigerian capital market.

He assured that the exchange would continue to trade in all securities including fixed income, derivatives, commodities and foreign exchange.

Recall that in June 2019, SEC registered its wholly owned central securities depository subsidiary, FMDQ Depository Limited, positioned to provide collateral caching, custodian and settlement services.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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