President, FMDA, Mr. Akinsowon Dawodu
The Financial Market Dealers Association (FMDA) has said it is currently in the final stage of getting an approval from the Securities and Exchange Commission (SEC) to acquire an Over-the-Counter (OTC) trading platform where different financial market instruments will be traded.
President, FMDA, Mr. Akinsowon Dawodu, disclosed this in an exclusive interview with THISDAY in Lagos.
According to Dawodu, the new OTC platform, when installed, will have the capacity to trade products such as forex, money market instruments, fixed income (both sovereign and corporate bonds) and derivatives.
Dawodu, who is also the Country Treasurer and Head of Fixed Income Currencies and Commodities, Citibank Nigeria Limited, explained: “What we are trying to do is to get SEC to formerly approve an OTC for the market. What we have now is that there is an OTC already in government bonds, so what we are trying to do is to get a formal approval from SEC for an OTC platform where different products such as forex, money markets, fixed income , derivatives and in the future, may be commodities, would be traded.
“But for now, what we have is a platform for just money market instruments and commercial papers. As part of that process, there is a capital requirement to be met and we have gone through that process. Part of that process also requires that we invest in technology and trading platforms or systems that will automate and improve trading process across all products.”
According to him, the dealers are currently in the final stage of getting the approval from SEC.
He stated that the goal of the association is to ensure that trading is put under one umbrella with standards and professionalism.
The FMDA boss said the association had the support of the Bankers’ Committee as well as the Central Bank of Nigeria (CBN) on the project.
Responding to enquiries on his outlook for the currency market for the rest of the year, Dawodu predicted that the naira would remain stable.
“There might be one or two activities and there may be some volatility as portfolio investors may come in or move out towards the end of the year. But basically the central bank, with the reserves up by $10 billion year-on-year, will comfortably be able to defend the currency. So, I see exchange rates being stable. Interest rates too will remain stable. People feel the central bank has to start easing monetary policy and that could happen next year.
“But in their meeting in November, maybe they will surprise the market. But I know that the governor and the monetary policy committee members are focused on price stability and they are very convinced of the efficacy of using forex to achieve that. They believe that forex stability is very key to price stability and that will always be a factor when they think of easing monetary policy rates.”