FMDQ Securities Exchange Limited has embraced technology to streamline the process of Commercial Paper (CP) applications, making it easier and faster for market participants to engage with the exchange. According to Mr. Oluwaseun Afolabi, Divisional Head of Market Architecture at FMDQ, the market is currently valued at an estimated N3 trillion.
Afolabi shared these insights at the 2024 Capital Market Correspondents Association of Nigeria (CAMCAN) Annual Workshop in Lagos, where the theme was ‘Banks’ Recapitalisation: Bridging the Gap Between Investors and Issuers in the Nigerian Capital Market.’
Since 2014, the CP market had faced several challenges, but it was reactivated with the necessary frameworks to support its growth. Afolabi noted, “Today, FMDQ has put in place technology solely for the processing of applications for commercial papers. So, you do not actually need to call someone. Just an application filed on the portal and it will respond immediately that the application has been received.”
The new system not only improves the application process but also enhances post-listing compliance, making it easier for businesses to adhere to market regulations. “The portal has been working seriously and even advanced the use of that system for other things such as post-listing compliance, among other aspects,” Afolabi explained.
FMDQ’s technological innovations come alongside the Securities & Exchange Commission (SEC) policies, which have facilitated a smoother process for listing bonds and other fixed income instruments. Afolabi highlighted that the timing process has been fast-tracked, thanks to the SEC’s framework policies.
On the Central Bank of Nigeria’s (CBN) banking sector recapitalisation exercise, Afolabi noted its potential to drive growth in the broader market. “When banks capitalise, they can do bigger fund programmes, the SEC can see their financial capacities to ensure the banks can raise N200 billion worth of funds and the market benefits from the exercise generally,” he said.
However, Afolabi stressed the importance of addressing information imbalances in the capital market. He emphasized that improved information sharing is key to resolving shareholder complaints and ensuring a more transparent market.
He also challenged journalists covering the market to play a more pivotal role in educating the public. “Journalists have to take a more central role in helping sharpen peoples’ minds in understanding more about what is happening in the capital market,” he stated.
With the integration of cutting-edge technology in CP applications, FMDQ is positioning itself as a leader in market innovation, fostering a more efficient, transparent, and accessible capital market.
