FMDQ says new CAMA will change financial markets

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FMDQ Headquarters

FMDQ Securities Exchange said the new Companies and Allied Matters Bill 2020 assented to by President Muhammadu Buhari would reposition Nigeria as a compelling destination of capital.

The company’s Group Chief Executive Officer, Mr Bola Onadele said in Lagos on Monday that the financial market and the economy would receive the long-awaited boost to spur economic development with the new CAMA.

The CAMA Bill, 2020 recently passed by the National Assembly, repeals the extant Companies and Allied Matters Act, 1990, and introduces several innovations aimed at enhancing ease of doing business in the country.

Onadele said when implemented, the new law would usher in a wave of innovative developments in the Nigerian financial market and as well improve the ease of doing business in the country.

He said: “With the increasing sophistication of the global financial markets comes the need for domestic markets to develop their architecture and infrastructure to support requisite advancement as well as align with international standards. 

“The new CAMA 2020 will position Nigeria and its capital market at par with its international counterparts.

“Chief of the several impactful provisions in the CAMA 2020, is the inclusion of netting and bankruptcy remoteness provisions, which signal the birth of a new financial market in Nigeria.

“The CAMA 2020 commendably sets the tone for the actualisation of key innovations in the market, providing enabling legal backing for netting, bankruptcy remoteness and attendant regulatory frameworks for the smooth functioning of financial markets in Nigeria.”

Onadele said that “the Act is instrumental to the successful takeoff of the derivatives market in Nigeria, a much-desired development, which will provide, amongst others, a wide range of risk management opportunities.”

He said the derivatives market would enhance market liquidity, improve price discovery, reduce risk capital charges and transaction costs as well as increase financial markets stability.

Onadele said, “FMDQ Clear, Nigerian’s first central clearing house (CCH), is well positioned to providing the much-needed central counterparty services, upon regulatory approval, and has proactively set aside a default resolution reserve with a near-term target of ₦20 billion.” (NAN)

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