FMDQ: Purpose, functions, power and history

Financial Markets Dealers Quotation (FMDQ) is a prominent player in the Nigerian financial market, providing crucial services to market participants. 

This article provides an in-depth look at the history of FMDQ, its functions, purpose, power, and other relevant details. From its inception to its current position as a leading financial market infrastructure, the article explores the significance of FMDQ in facilitating a fair and transparent market. Get ready to understand the important role FMDQ plays in the Nigerian financial industry.

History and background of FMDQ

Financial Markets Dealers Quotation (FMDQ) is a Nigerian financial market infrastructure established in 2012 to promote the development of the Nigerian capital market. It serves as a platform for the quotation, trading, and settlement of financial instruments, such as bonds, currencies, and money market instruments.

Before the establishment of FMDQ, the Nigerian financial market was highly fragmented, making it difficult for market participants to access transparent pricing information and trade efficiently. FMDQ was formed to address these challenges and promote the growth of the market by providing an organized, efficient, and transparent trading platform.

FMDQ operates as a self-regulatory organization (SRO) and is overseen by the Securities and Exchange Commission (SEC). Over the years, it has established itself as a key player in the Nigerian financial market, providing market participants with accurate and reliable pricing information, improving the efficiency of the trading process, and facilitating the settlement of trades.

Functions of FMDQ in the Nigerian financial market 

FMDQ provides a range of services to market participants in the Nigerian financial market, aimed at promoting the growth of the market and improving its efficiency. Some of its key functions include:

1. Quotation of financial instruments

FMDQ serves as a platform for the quotation of financial instruments, such as bonds, currencies, and money market instruments.

This helps market participants access transparent and accurate pricing information, which is essential for making informed investment decisions.

2. Trading

FMDQ provides a trading platform that enables market participants to trade financial instruments efficiently.

This includes an electronic trading platform and an over-the-counter (OTC) market for dealing in financial instruments.

3. Settlement of trades

FMDQ facilitates the settlement of trades between market participants, helping to reduce settlement risk and improve the overall efficiency of the market.

4. Market Data

FMDQ provides market participants with access to a range of market data, including pricing information, market statistics, and other relevant data. This information is critical for market participants to make informed investment decisions.

5. Regulation

As a self-regulatory organization (SRO), FMDQ has the power to regulate market participants and ensure that they adhere to market rules and regulations. This helps to maintain the integrity of the market and promotes fair and transparent trading.

Purpose and objectives of FMDQ 

The purpose of Financial Markets Dealers Quotation (FMDQ) is to promote the growth and development of the Nigerian financial market by providing a platform for the quotation, trading, and settlement of financial instruments. Some of the specific objectives of FMDQ include:

1. Improving market efficiency: One of the primary objectives of FMDQ is to improve the efficiency of the Nigerian financial market. This is achieved by providing a centralized platform for trading, which helps to reduce the fragmentation that existed in the market before its establishment.
2. Promoting transparency: FMDQ aims to promote transparency in the financial market by providing market participants with access to accurate and reliable pricing information. This information is essential for making informed investment decisions and helps to promote fair and transparent trading.
3. Reducing settlement risk: FMDQ facilitates the settlement of trades between market participants, reducing settlement risk and improving the overall efficiency of the market.
4. Regulating the market: As a self-regulatory organization (SRO), FMDQ has the power to regulate market participants and ensure that they adhere to market rules and regulations. This helps to maintain the integrity of the market and promotes fair and transparent trading.
5. Encouraging investment: By providing market participants with accurate and reliable information, FMDQ helps to encourage investment in the Nigerian financial market. This, in turn, helps to promote the growth and development of the market.

Power of FMDQ in regulating the financial market 

Financial Markets Dealers Quotation (FMDQ) is a self-regulatory organization (SRO) in the Nigerian financial market, and as such, it has the power to regulate market participants and enforce market rules and regulations. Some of the key powers of FMDQ in regulating the financial market include:

1. Setting market rules and regulations: FMDQ has the power to set rules and regulations for market participants, ensuring that they adhere to ethical and professional standards. This helps to maintain the integrity of the market and promotes fair and transparent trading.
2. Enforcing market discipline: FMDQ has the power to enforce market discipline, ensuring that market participants comply with market rules and regulations. This includes imposing fines or sanctions on market participants who engage in unethical or unprofessional conduct.
3. Monitoring market activities: FMDQ monitors the activities of market participants, ensuring that they adhere to market rules and regulations. This helps to maintain the stability and integrity of the market, reducing the risk of financial fraud or other unethical practices.
4. Promoting market transparency: By regulating market participants and enforcing market rules and regulations, FMDQ helps to promote transparency in the financial market. This, in turn, helps to promote fair and transparent trading and encourages investment in the market.

Other relevant information about FMDQ

Financial Markets Dealers Quotation (FMDQ) is a vital player in the Nigerian financial market, and several other key aspects of its operations are worth mentioning. Some of these include:

1. Market education: FMDQ provides market participants with access to educational resources, including training programs and market seminars, aimed at increasing their knowledge and understanding of the financial market.

2. Market research: FMDQ produces and disseminates market research and analysis, providing market participants with valuable insights into market trends and conditions.

3. Market development: FMDQ is actively involved in the development of the Nigerian financial market, working with market participants and regulatory bodies to identify and implement initiatives that promote market growth and development.

4. Market representation: FMDQ represents the interests of market participants and serves as a key liaison between market participants and regulatory bodies.

5. Market innovation: FMDQ is committed to innovation, using technology to improve the efficiency and transparency of the financial market. This includes the development of electronic trading platforms, mobile applications, and other digital solutions.

Conclusion 

FMDQ plays a multi-faceted role in the Nigerian financial market, providing a range of services and initiatives aimed at promoting market growth and development. Its efforts in market education, research, representation, and innovation are critical to the success of the financial market and the growth of the Nigerian economy.

The Financial Markets Dealers Quotation (FMDQ)is a financial market that is regulated by the Nigerian Security and Exchange Commission (SEC). Only public companies’ securities can be traded.