In a statement, it said there was the need for enhanced risk management in the nation’s money market.
While speaking at RIMAN’s quarterly risk round table programme with the theme,’Derivative risks: The role of FMDQ in the development of the derivatives market in Nigeria,’ the Associate Executive Director, Corporate Development, FMDQ, Ms Kaodi Ugoji, commended the association of risk managers for its role in creating risk management advocacy and awareness in Nigeria.
During her welcome address at the event which was hosted by FMDQ OTC Securities Exchange, she said that over the years, RIMAN had achieved greatness in promoting best practice risk management in Nigeria.
The President, RIMAN, Mr Magnus Nnoka, noted that RIMAN was advancing in the effort to extend risk management education to all sectors of the economy and African countries, with the recent establishment of RIMAN Risk Management Institute.
He gave the assurance that both institutions would continue to collaborate in ensuring that the knowledge and practice of risk management in Nigeria was continuously promoted, adding that with the existence of the FMDQ OTC Securities Exchanges, derivatives would function better as a product and as a risk transfer mechanism.
Also, the Vice-President, Market Architecture, FMDQ, Ms Jumoke Olaniyan, while speaking at the event stressed the need to ensure a risk management framework that would ensure the stability of the market.
With an asset base of the top 10 banks in the country that was around N36.5tn, she said a look at their assets in products instruments impacted by market risk showed that a huge percentage was in treasury bills, 24 per cent in bonds and another 4.75 per cent in equity.
Olaniyan expressed delight at the progress of the review of the Companies and Allied Matters Act, noting that it was a well-crafted legal and regulatory framework for any market globally.
She said, “What was critical for us in Nigeria was we did not have what we call a netting law and so our financial transactions were subject to the bankruptcy laws of Nigeria”
“We did not have a law that protected financial market transactions and so what we have done in FMDQ is, along with the president and other stakeholders in the market, we conducted a review of the CAMA which did not have bankruptcy remoteness law in it.
“We were able to infuse the netting law into the CAMA amendment bill which we were so excited to hear, it has passed through the House and the Senate; the Senate passed it mid-last year and the House passed it January this year, so we are literally 80 per cent there. We are just waiting for the president to sign the law and that literally puts us on the international market.”
She noted further that the trading platform was currently looking at introducing two interest rate-based product by the third quarter of 2019.