FMDQ admits Stanbic IBTC Bank CP as First Quotation on its Platform. Sequel to the release of its Commercial Paper Quotation Process and Rules, FMDQ OTC PLC (FMDQ) has admitted the first commercial paper (CP) for quotation on its platform. The quotation of the “Stanbic IBTC Bank PLC (Stanbic IBTC Bank) N100bn Multi-Currency Commercial Paper Issuance Programme” on the FMDQ platform ushers in the new era of short-term corporate papers to the Nigerian OTC market. This quotation provides the necessary visibility and liquidity for the secondary market trading of CPs. With the FMDQ CP Quotation Process and Rules put in place, investors in the Stanbic Bank CP can have confidence in their investment in terms of transparency and liquidity.
The introduction of CP quotation in the Nigerian financial market serves as a first step towards the provision of unprecedented transparency and governance in the CP market. FMDQ, through this initiative, purposes to build a vibrant CP market by providing price/value data and detailed issuers’/issue information on FMDQ quoted CPs to stakeholders – investors, issuers and regulators – thereby strengthening the governance of the CP market, positioning the money market for improved price formation and eventually, the emergence of a transparent corporate interest rate fixing in the Nigerian OTC financial market.
The re-organisation of the CP market has come at an opportune time as banks, in compliance with Basel 3 capital and liquidity provisions, are beginning to re-position their balance sheets. An active and vibrant CP market is also of tremendous benefit to domestic and offshore investors – fund managers, pension fund administrators (PFAs), other corporates etc. – seeking investments in alternative asset classes and to corporates desiring more efficient ways to raise funds.