The Central Bank of Nigeria has called on FMDQ OTC Plc and its dealing members to abide by the principle of good corporate governance and observe extant laws and regulations as the over-the-counter platform hand out licences.

According to the bank, it is by acting in good faith, devoid of conflict of interest at all times and introducing best business practices among its members that FMDQ OTC can achieve its goal of strengthening the financial system.

The Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, said these in her address at the maiden licensing of FMDQ OTC dealing members, which was held in Lagos on Wednesday.

Inaugurated in November 2013, FMDQ OTC is a Securities and Exchange Commission-licenced over-the-counter market and a self-regulatory organisation mandated to transform the OTC markets and promote transparency, governance, market liquidity.

Martins, expressed the confidence that it would achieve its objectives.

She said, “In my view, the emergence of FMDQ will greatly enhance the liquidity, transparency and safety of transactions in the inter-bank market for fund intermediation, foreign exchange dealings, repurchase transaction and government securities.”

The CBN director, who said the financial markets played a critical role in the accumulation of capital and the production of goods and services, explained that while FMDQ was at a vantage position to help Nigeria to achieve a world-class financial system, it had huge expectations to meet.

She called on FMDQ OTC to, among other things, put measures in place to ensure that it achieved its objectives as an SRO.

She said, “It (FMDQ) must put in place an arbitration mechanism for the resolution of disputes between members and/or between members and their constituents. It must put in place a system for proceeding against members committing breach of the governing norms or articles including provisions for suspension or expulsion.”

The Chairman, FMDQ OTC, Mr. Aigboje Aig-Imoukhuede, who presented licences to 26 dealing members at the event, said it provided an interactive forum for the formal activation of the capital market presence of FMDQ dealing members.

He stressed that the regulation of the OTC markets was important.

“Financial markets which are more wholesale in nature have fallen under the provenance of over-the-counter markets which had until recent times been highly unregulated and decentralised,” he said.

The financial crisis of 2007/2008, he said, led to greater interest in regulating OTC markets, especially the derivative products. This led to the establishment of FMDQ.

Aig-Imoukhuede added, “The importance of regulation in this market cannot be overemphasised as FMDQ is a market for all the stakeholders of the OTC market. This ceremony is a demonstration of the importance the OTC market attaches to regulation.”

The dealing members that received licences on Wednesday evening are Access Bank, Associated Discount House, Citi Bank, Consolidated Discount Limited, Diamond Bank, Ecobank Nigeria Limited, Enterprise Bank and First City Monument Bank.

Others are Fidelity Bank, FSDH Merchant Bank, First Bank, Guaranty Trust Bank, Heritage Bank, Kakawa Discount House Limited, Keystone Bank, Mainstreet Bank and Rand Merchant Bank.

Skye Bank, Stanbic IBTC Bank, Standard Chartered Bank and Sterling Bank also got licences just like Union Bank, UBA, Unity Bank, Wema Bank and Zenith Bank.

The Chief Executive Officer, Nigerian Stock Exchange, Mr. Oscar Onyema, who was at the event, congratulated the dealing members and urged them to adhere to FMDQ’s rules.

Source: Punch (by Simon Ejembi)