E-Financial
FMDQ says New Companies & Allied Matters Act to Reposition Nigerian Financial Markets
FMDQ Securities Exchange commended the new Companies and Allied Matters Bill 2020 assented to by President Muhammadu Buhari, saying it would reposition Nigeria as a compelling destination of capital.
Bola Onadele, FMDQ Group Chief Executive Officer, said in Lagos that the country’s financial market and the economy would receive the long-awaited boost to spur economic development with the new CAMA. Buhari had on August 7 in Abuja assented to the CAMA Bill, 2020 recently passed by the National Assembly.
The Bill, now Companies and Allied Matters Act, 2020, repeals and replaces the extant Companies and Allied Matters Act, 1990, and introduces several corporate legal innovations aimed at enhancing ease of doing business in the country.
Some of such innovation are reduction in filing fee and other reforms to encourage small and medium enterprises; provisions for the establishment of private companies with a single shareholder and limited liability partnerships and limited partnerships, among others”
“With the increasing sophistication of the global financial markets comes the need for domestic markets to develop their architecture and infrastructures to support requisite advancement as well as align with international standards, and 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.
He noted that these game changing provisions would cure critical legal deficiencies that hitherto affected the development of the financial markets.
Onadele said that the netting provisions in the CAMA would address the credit risk challenges, operational and legal bottlenecks of gross settlement for spot and derivatives transactions.
“The Act is instrumental, in no small measure, 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 added.
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 counter-party services, upon regulatory approval, and has proactively set aside a default resolution reserve with a near-term target of N20 billion.”
E-Financial
Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme
“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.
MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.
Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.
The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.
The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.
E-Financial
CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering
Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.
The inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.
In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN, disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.
“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.
The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.
However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.
Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.
Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.
E-Financial
CBN Urges Banks to Expedite Action on Recapitalisation
Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.
Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.
The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.
Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.
“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”
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