IN line with its mandate to promote price discovery and transparency in the Nigerian financial markets, FMDQ OTC Securities Exchange has revised the methodology of the daily market Spot Foreign Exchange, FX, closing rate to reflect the last executed trade on the designated FX Trading System at 2:00 PM.
FMDQ publishes, amongst others, daily closing prices/rates for the fixed income securities as well as currencies markets, using a pre-defined methodology to ensure credibility of the prices. Presently, FMDQ uses Thomson Reuters FX Trading System as its designated Fx trading system.
The revision, according to the Exchange, is to make the closing rate for the forex market all-inclusive and fair to all participants. In a notice published on its website, titled “Change in The Methodology for Daily Market Spot Foreign Exchange (FX) Closing Rate”, FMDQ highlighted the need for all market participants to play their parts in ensuring the credibility of the Nigerian FX market.
It also encouraged its dealing member (banks) to confirm all trades and voice report trades done via other medium (including telephones) during business hours (i.e. by 2:00 PM daily) on the designated FX Trading System in line with the revised methodology for the FX closing rate.
The OTC Exchange had been concerned with the significance of confirmed trades on the designated FX Trading System and had earlier released a Market Notice (MN-03).
However, it stated that it has received reasonable assurance that dealing member will promptly update their inter-member trades and trades with clients on the designated FX Trading Systems. accordingly, necessitating the replacement of the Market Notice with the updated version.
It further encouraged the dealing members to advise their clients to expedite action on the Central Bank of Nigeria (CBN)’s FX on-boarding directive for corporates to further enhance the transparency of the market.