By Modupe Gbadeyanka
FMDQ OTC Securities Exchange has formalised its partnership with S&P Dow Jones Indices through the signing of a memorandum of understanding (MoU) for the development and publication of co-branded fixed income indices in the Nigerian financial market at a brief ceremony on Tuesday, February 7, 2017, at FMDQ’s offices.
The partnership is to improve price discovery and transparency in the Nigerian financial markets.
In attendance to witness this landmark event were representatives of SPDJI, led by Mr Kurt Zyla, Managing Director & Global Head of Exchange Relationships, SPDJI; the Director-General, Securities and Exchange Commission (SEC), represented by Mr Stephen A. Falomo, Head, Lagos Zonal Office, SEC; Director-General of the National Pension Commission, represented by Mr Babatunde Oladipo Phillips, Head, Benefits Administration Unit; representatives of the Executive Boards of Pension Fund Operators of Nigeria; Fund Manager Association of Nigeria; Financial Markets Dealers Association; Association Of Corporate Treasurers of Nigeria; and key players in the Nigerian financial markets landscape.
FMDQ embarked on the journey towards providing reliable and credible benchmarks in 2014 with the launch of the FMDQ FGN Bond Index. Following the launch, the OTC Securities Exchange continued to identify ways to improve the existing index and align it with international best standards as set out in the International Organisation of Securities Commission (IOSCO) Principles for Financial Benchmarks. This necessitated numerous engagements with stakeholders including but not limited to fund/asset managers and financial services regulators, who all identified the governance of the index as a very critical value-add for the successful delivery of the aforementioned mandate.
To achieve this, FMDQ sought to partner with a world-class index provider, leading to the partnership with SPDJI which was identified as a credible brand and renowned for its index governance.
SPDJI is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®.
More assets are invested in products based on SPDJI than on any other provider in the world.
With over 1,000,000 indices and more than 120 years of experience constructing innovative and transparent solutions sovereign debt publicly issued by the Federal Government of Nigeria in the domestic market; which shall be the first, SPDJI has defined the way investors measure and trade the markets.
The partnership between FMDQ and S&P DJI marks the announcement of the adoption of the S&P Nigeria Sovereign Bond Index, a bond index which tracks the performance of local currency denominated index to be co-branded under the partnership.
Speaking at the ceremony, Mr Bola Onadele Koko, Managing Director/CEO, FMDQ OTC Securities Exchange, said “this is indeed a landmark achievement as the development of these co-branded fixed income indices aims to revolutionise the face of the Nigerian financial markets by providing investors with a consistent, credible and objective measure for the performance of their investments in the Nigerian financial markets.
“This will likewise serve as an acceptable benchmark for the fixed income market and provide transparent and credible information to the investing public and other persons with interest in the Nigerian financial market”.
According to Mr Alex Matturri, Chief Executive Officer, S&P Dow Jones Indices, “S&P Dow Jones Indices has been calculating Nigerian indices for a number of years and we have more recently expanded our offering to include dividend and fixed income indices. We’re delighted to officially sign the memorandum of understanding between S&P Dow Jones Indices and FMDQ and the adoption of the S&P Nigeria Sovereign Bond Index.
“As the Nigerian financial market develops and FMDQ establishes its position as the foremost debt capital securities exchange, we’re pleased to be able to bring greater index-based solutions, research and analysis to the Nigerian market.
“Following the adoption of the S&P Nigeria Sovereign Bond Index and our partnership with FMDQ, we’re looking forward to meeting the evolving needs of investors for benchmarks that will continue to define the way investors measure and trade the market”.
FMDQ remains resolute and unwavering in its commitment to develop the Nigerian debt capital market and promote an efficient, transparent, and well-regulated financial market, which will attract and retain investors, both domestic and foreign.
