Download CMC Q3 2015 FMDQ Update Report

FMDQ OTC Securities Exchange
FMDQ CMC Update Report
Jumoke Olaniyan
Group Head, Market Development
November 25, 2015
Global Competitiveness
Operational Excellence
Liquidity
Diversity
Outline
Outline
Part 1
FMDQ OTC Market Sizing
2
Part 2
Nigerian Debt Capital Market Transformation
Governance and Structure
3
Part 3
Specialist Dealing Member (SDM) Project Plan
4
Part 4
FMDQ Listings and Quotation
5
FMDQ Market Development Workgroup (FMDW)
Part 5
6
FMDQ Market Surveillance
1
Outline
FMDQ OTC Market Sizing
JANUARY - OCTOBER 2014 MARKET TURNOVER REPORT
JANUARY - OCTOBER 2015 MARKET TURNOVER REPORT
Turnover (₦'mm)
Turnover (₦’mm)
Foreign Exchange
Foreign Exchange Derivatives
Treasury bills
FGN bonds
Other bonds*
Eurobonds**
Repurchase Agreements/Buy-Backs
Unsecured Placements/Takings
Money Market Derivatives
24,048,922
5,041,787
20,853,148
6,177,928
227,194
19,186,527
4,843,887
50,829
80,430,222
Foreign Exchange
Foreign Exchange Derivatives
Treasury Bills
FGN Bonds
Other Bonds*
Eurobonds
Repurchase Agreements/Buy-Backs
Unsecured Placements/Takings
Money Market Derivatives
23,754,706
6,263,228
42,128,181
8,733,319
119,129
35,278
27,597,729
11,186,876
101,235
119,919,681
USD equivalent ('mm)
502,689
USD equivalent ('mm)
609,317
No. of Business Days
Average Daily Turnover
213
377,607
No. of Business Days
Average Daily Turnover
204
587,842
USD equivalent (mm)
Note: USD/₦ @160
2,360
USD equivalent ('mm)
Note: USD/₦ @ 196.81
• Other bonds include Agency, Sub-national, Corporate and Supranational Bonds
Source: FMDQ Data Portal: Figures reported by Dealing Members on a
2 week ending basis
2,987
Nigerian
Outline Debt Capital Market Transformation Governance
and Structure
Steering Committee
(SteerCo)*
• Mary Uduk, Director,
Investment Management (SEC)
• CBN Director, Financial Markets Dept (Emmanuel Ukeje)**
• PenCom Head, Investment Supervision (Ehimeme Ohioma)
• FMDQ MD/CEO (Bola Onadele. Koko)
• Bolaji Balogun
• Chuka Eseka
Transformation
Committee
(TransCo)
• Abdulkadir Abbas (Dep. Director, Securities
Offering, SEC)
• Kemi Awodein
• Kobby Bentsi-Enchill
• Vice Chairman, FMDQ Market Development
Workgroup (David Adepoju)
Project
Management
Office (PMO)
• Emmanuel Etaderhi (Chair, FMDQ Govt
Relations)
• Supported by Sonnie Ayere, Yewande Sadiku &
Michael Larbie
• Transformation Manager (PMO)
• Supported by Global Capital Market Experts
(India, South Africa & Malaysia)
Sub-Committees(SubCos)
Product & Infrastructure
Innovation
Chair, Dipo Odeyemi
Regulation Consolidation
Chair, Chinua Azubike
Investor/ Issuers &
Intermediaries Engagement
/Education
Chair, Kobby Bentsi Enchill
Market Liquidity &
Enhancement
Chair, David Adepoju
Planning Committee /FMDQ/ Consultant representatives
•
•
•
•
•
•
•
Representatives
Market
PenCom
CBN
FIRS
NAICOM
NIA
FMDQ MRG (Olamide NiyiAfuye)
•
•
•
•
Market
NMRC
Infrastructure Bank
Development Finance
Institutions (DFIs)
• AIHN
• FMDQ MDG (Jumoke
Olaniyan)
•
•
•
•
•
•
•
•
•
Market
CBN
Custodian
PenCom
PFA
CSCS
FMDA
FMDQ MDG (Adebola Lawal)
FMDQ MSG (Segun Akintoye)
*FMDQ MD/CEO (Project Sponsor), members of DCM Visioning Team and Transformation Committee Members will interface with other regulatory agencies
**Chairman, FMDQ Market Development Workgroup
3
•
•
•
•
•
•
•
•
Market
Custodian/Trustees
PFA
Rating Agencies
DMO
Commercial Banks
Capital Market Associations
FMDQ BDG (Tumi Sekoni)
Outline
FMDQ Listings and Quotation - 2015
Category
Instrument
FGN Bonds
All FGN Bonds
Sub-Nationals
Corporate
Commercial
Papers
Value (₦ ‘bn)
Coupon (%)
4,846.82
Date Listed
Jul 7, 2015
Benue State Government Bond
5.00
16.5
Sep 7, 2015
Cross River State Government
Bond (Series 1)
United Bank for Africa (UBA) PLC
Series I
Stanbic IBTC Bank PLC Series I
(Tranche A)
Stanbic IBTC Bank PLC Series I
(Tranche B)
8.00
17
Nov 16, 2015
30.50
16.45
Mar 19, 2015
15.44
13.25
Apr 17, 2015
0.10
182 day
T.Bills + 1.20
Apr 17, 2015
FCMB Financing SPV PLC Series I
26.00
14.25
May 11, 2015
Fidelity Bank PLC
30.00
16.48
Sep 7, 2015
NMRC PLC Series I
8.00
14.9
Sep 7, 2015
Wema Bank PLC
8.15
15.251
Sep 16, 2015
17.71
12.15861
Nov 2015
Nigerian Breweries PLC
Note
1 Discount Rate
4
Outline
SDM
Project Plan
December
PLANNING
 Final SDM Framework
− Application Process
February
Q2 2016
IMPLEMENTATION
MODIFICATIONS
 Q-Deal© User
Acceptance Test
− One day Simulation
Workshop
 Payment of
Membership Dues
− 2WQ Simulation
testing (Dummy
trading Dec 2015 –
Jan 2016)
 Provisional Licencing
 Settlement Bank SignOns

Q-Deal©
Upgrade:
− Real-Time MTM
Q3 2016
CLOSING
 Full Licencing
 Revised Trading
Collateral
Requirements
− Liquidity Providers
(DMs) Integration
 Assignment of Initial
Trading Collateral
 T.bills Trading with
Settlement Bank
Services
 T.bills Trading Only
 FMDQ Clearing
House
 Client Services
 Daily End of Day
Close-Out
 E-Bond Price
Discovery
5
 Variable Licencing
− T.bills Only
− T.bills + Bonds
Outline
FMDQ Market Development Workgroup (FMDW)
Initiative
FMDQ
Market
Development
Workgroup (FMDW)
Update

FMDQ activated the Market Development Workgroup, which is challenged to shape
reforms in the Nigerian over-the- counter (OTC) market. The Workgroup presents a
platform on which all OTC market development programs can be coordinated

The FMDQ Market Development Workgroup (FMDW), which is made up of senior
representatives from market associations, trade groups and financial market
infrastructure providers, is responsible for coordinating and monitoring all FMDQ OTC
market development activities

Consequently, the Board mandated Management to develop a Market Development
Workgroup Framework and activate same. To this end Management documented a
Market Development Workgroup Framework highlighting the Chair, Board Markets and
Technology (BMTC) as the Chairman of the Workgroup

The inaugural meeting was held and the Workgroup Members reviewed its Terms of
Reference and received an update on FMDQ market development activities. The
Workgroup expressed satisfaction with the market development focus and efforts of the
Board and Management of FMDQ.

The next meeting is scheduled to hold fourth quarter of 2015, to develop a
comprehensive Market Development Initiatives Report for 2016 which will be submitted
to FMSC ahead/during the Bankers’ Committee Retreat
6
Outline
FMDQ Market Surveillance
Initiative
Update
Implementation of Ebond Infractions and
Penalties Guide – See
Appendix
 The number of Dealing Members (DMs) that recorded E-Bond trading infractions, received
warning letters and cash sanctions dropped steadily through the months from seventeen
(17) in April 2015 to a record low of three (3) in September 2015. There was however a
slight increase to Six (6) DMs in October 2015
 There was an increase in the number of DMs without an E-bond trading infractions which
rose from Three (3) DMs in April 2015 to Nine (9) DMs in September 2015. This number
decreased marginally to Eight(8) DMs in October 2015
 FMDQ plans to send out congratulatory mail to DMs, on their improved level of
compliance
 A meeting with the Bonds and Money Market Workgroups was organised by FMDQ where
the arbitrary widening of market spreads and market volatility was discussed. However,
this trend persisted especially in the Treasury bills market
 FMDQ is currently testing surveillance data and hopes to commence the monitoring of
infractions on maintenance of standard spread and replenishment of quotes in the market
once this is finalised. This is estimated to be deployed in January 2016. This surveillance
tool should reduce the prevalence of arbitrary widening of market spreads
 A risk assessment pre-inspection questionnaire has been developed for DMs. Examination
and inspection is expected to commence soon
 Financial sanctions for the months of August – October 2015 have been debited for
Trading infractions
7
Outline
APPENDIX
8
Outline
Market Surveillance Summary – August 2015
Summary of E-Bond trading infractions for August, 2015
Dealing Member
Access Bank PLC
Diamond Bank PLC
Ecobank Nigeria Limited
First Bank of Nigeria Limited
Rand Merchant Bank Limited
Skye Bank PLC
Stanbic IBTC Bank PLC
Wema Bank PLC
Zenith Bank PLC
Citibank Nigeria Limited
Enterprise Bank Limited
Guaranty Trust Bank PLC
Compliance
Ranking
1
1
1
1
1
1
1
1
1
10
10
10
1
1
1
-
-
Total
Infractions
1
1
1
A
B
C
Infractions with
Cash Sanction
-
Cash Sanction
(N)
-
Standard Chartered Bank Nigeria Limited
10
-
-
1
1
-
-
Sterling Bank PLC
United Bank for Africa PLC
Fidelity Bank PLC
FSDH Merchant Bank Limited
Kakawa Discount House Limited
Keystone Bank Limited
10
10
16
16
16
16
1
2
1
2
2
1
1
-
-
1
1
2
2
2
2
-
-
Union Bank of Nigeria PLC
20
3
-
-
3
1
500,000.00
Coronation Merchant Bank Limited
21
6
1
-
7
1
500,000.00
Heritage Banking Company Limited
22
2
1
4
7
1
500,000.00
First City Monument Bank Limited
23
8
-
4
12
2
1,000,000.00
Unity Bank PLC
24
9
2
4
15
2
1,000,000.00
3,500,000.00
Total
A
Responding to less than 35% of mandatory RFQs
B
C
-
Delay in submitting weekly trade reports
Failure to provide firm quotes for all benchmark securities by 10.00AM
Nil
Source: FMDQ Market Services
9
Outline
Market Surveillance Summary – September 2015
Summary of E-Bond trading infractions for September, 2015
Compliance
Total
Infractions with Cash Sanction
Dealing Member
A
B
C
Ranking
Infractions Cash Sanction
(N)
Access Bank PLC
1
Diamond Bank PLC
1
Ecobank Nigeria Limited
1
Rand Merchant Bank Nigeria Limited
1
Skye Bank PLC
1
Standard Chartered Bank Nigeria Limited
1
United Bank for Africa PLC
1
Kakawa Discount House Limited
1
Union Bank of Nigeria PLC
1
First Bank of Nigeria Limited
1
Stanbic IBTC Bank PLC
1
FSDH Merchant Bank Limited
1
Zenith Bank PLC
13
1
1
Guaranty Trust Bank PLC
13
1
1
Sterling Bank PLC
13
1
1
Fidelity Bank PLC
13
1
1
Keystone Bank Limited
13
1
1
Heritage Banking Company Limited
13
1
1
Citibank Nigeria Limited
19
2
2
Wema Bank PLC
20
2
1
3
Coronation Merchant Bank Limited
21
7
7
1
500,000.00
First City Monument Bank Limited
21
6
1
7
1
500,000.00
Unity Bank PLC
23
18
1
14
33
2
1,000,000.00
2,000,000.00
Total
A Responding to less than 35% of mandatory RFQs
B
C
-
Delay in submitting weekly trade reports
Failure to provide firm quotes for all benchmark securities by 10.00AM
Nil
Source: FMDQ Market Services
10
Outline
Market Surveillance Summary – October 2015
Dealing Member
Access Bank PLC
Citibank Nigeria Limited
Fidelity Bank PLC
First Bank of Nigeria Limited
FSDH Merchant Bank Limited
Stanbic IBTC Bank PLC
Union Bank of Nigeria PLC
Zenith Bank PLC
Diamond Bank PLC
Ecobank Nigeria Limited
Rand Merchant Bank Limited
Skye Bank PLC
Wema Bank PLC
Coronation Merchant Bank Limited
Kakawa Discount House Limited
Sterling Bank PLC
United Bank for Africa PLC
Guaranty Trust Bank PLC
Standard Chartered Bank Nigeria
Limited
First City Monument Bank Limited
Keystone Bank Limited
Heritage Banking Company Limited
Unity Bank PLC
Total
Summary of E-Bond trading infractions for October, 2015
Compliance
Total
Infractions with
Cash
A
B
C
Ranking
Infractions Cash Sanction Sanction (N)
1
1
1
1
1
1
1
1
8
1
1
8
1
1
8
1
1
8
1
1
8
1
1
14
1
1
2
14
1
1
2
14
2
2
17
1
2
3
18
4
4
1
500,000.00
19
5
-
-
5
1
500,000.00
20
20
22
23
6
6
1
11
1
-
5
11
6
6
7
22
1
1
1
2
500,000.00
500,000.00
500,000.00
1,000,000.00
3,500,000.00
A
Responding to less than 35% of mandatory RFQs
B
C
-
Delay in submitting weekly trade reports
Failure to provide firm quotes for all benchmark securities by 10.00AM
Nil
Source: FMDQ Market Services
11
Global Competitiveness
Operational Excellence
Liquidity
Diversity