FMDQ OTC Securities Exchange has granted National Pension Commission (PenCom) online real time access to FMDQ’s trading system(s) –a development which will among others promote increased transparency in trades at OTC debt capital market, efficient pricing of transactions, higher professionalism of players in the fixed income markets and fair returns on pension fund investment.
FMDQ formalised this partnership with PenCom through the co-signing of a regulatory supervision collaboration agreement held recently at the Commission’s offices in Abuja.
PenCom, via this agreement, will be conferred membership on FMDQ as an Affiliate Member (Regulators), providing the Commission with benefits including but not limited to data access and market visibility rights over the market activities of the Commission’s supervisees within FMDQ and access to real-time pre- and post-trade prices on fixed income securities.
This landmark achievement is expected to change the face of Nigerian financial markets from the buy-side perspective towards investor protection, integrity of service, fair return on investments and ultimately, the development of the nation’s economy.
The development is also part of the efforts geared towards the realisation of FMDQ corporate vision and agenda.
“This partnership which would grant PenCom online real time access to FMDQ’s trading system(s), will among others, promote increased transparency in trades, efficient pricing of transactions, higher professionalism of players in the fixed income markets and fair returns on pension fund investment, for the ultimate benefit of pension contributors and the Nigerian economy at large,” Chinelo Anohu- Amazu, director-general of PenCom, said at the brief signing ceremony held at the Commission’s offices in Abuja.
Market watchers applaud this recent development, which offers the regulator fair view on returns on pension fund investment because Pension Fund Assets are invested in bonds, sukuk, and other debt instruments issued by any state/local government or its agencies or wholly-owned companies of the government as stipulated.
Pension assets are also invested in money market instruments and commercial papers (CPs) of corporate entities.
Also at the ceremony, Bola Onadele Koko, MD/CEO, FMDQ said, “this partnership will seek to achieve among others, the Commission’s objectives (as outlined in the Pension Reform Act, 2014), through data access and visibility of its supervisees’ (Pension Fund Administrators (PFAs)) transactions on FMDQ”.
He said the partnership would achieve improved transparency of all PFAs’ transactions in the Nigerian fixed income market, as well as the money market through the applicable system(s); capacity building sessions for relevant PenCom Staff on the use of the applicable system(s); and the development of performance benchmarks for fixed income asset classes: bonds (sovereign, sub-national and corporate), money market securities (treasury bills, commercial papers etc) and fixed deposits.
Others in attendance to witness this landmark event include Daisy Ekineh, chair, Board Regulation and Risk Management Committee, FMDQ; key representatives of the Central Bank of Nigeria (CBN) Banking Supervision and Financial Markets Departments and other key representatives from FMDQ and PenCom.
Earlier in her opening address, the PenCom DG acknowledged and commended FMDQ on its positive impact and giant strides in the development of the Nigerian Financial System, and noted that this Regulatory Supervision Collaboration Agreement executed with the Exchange, will serve to enable the realisation of PenCom’s investment objectives of safety of pension assets and maintenance of fair returns on investment.
Ekineh, who is also an independent non-executive director at FMDQ, highlighted, “this ceremony marks the formalisation of a partnership expected to be formidable and long-standing, as it will bring about integrity of service, assured investor protection and fair return on investments, serving to fundamentally change the way in which our financial markets operate to the benefit of the nation’s investors, in particular, the pension assets, and ultimately, the Nigerian economy.”
FMDQ, in its unwavering commitment to support efforts to galvanise the development of the Nigerian economy, remains resolute in promoting an efficient, transparent and well-regulated financial market, which will attract and retain investors (domestic and foreign).
Nigeria’s pension funds are a fast-growing and useful asset pool for funding infrastructure projects in Nigeria.
The National Pension Commission recently said that the asset pool made up of contributor’s funds, and managed by Pension Fund Administrators (PFAs) is currently at N5.3 trillion.
