Financial System Strategy 2020 FSS 2020 FSS 2020

Financial System Strategy 2020 (FSS 2020) FSS 2020 Initiatives: Financial Markets Sector Updates A PRESENTATION TO 2017 Q 2 CAPITAL MARKET COMMITTEE MEETING (CMC) BY: M. D. SULEYMAN DIRECTOR FSS 2020

Outline • FINANCIAL MARKETS FORUM • FUNCTIONS OF FINANCIAL MARKETS FORUM • FINANCIAL MARKET FORUM MEMBERS • ACTIVITIES OF INSTITUTIONS • REVIEW OF SOME OF THE FINANCIAL SYSTEM BILLS • NEXT STEPS Slide 2

Financial System Strategy 2020 FINANCIAL MARKETS FORUM To provide a consultative forum that can effectively address the issues and risks arising in the Nigerian Financial Markets with particular reference to the achievement of the FSS 2020 Financial Markets Strategy. 3

FUNCTIONS OF FINANCIAL MARKETS FORUM Financial System Strategy 2020 The functions of the Financial Markets Forum are: § To facilitate co-operation among FSS 2020 implementing institutions in initiating, developing, carrying out and monitoring measures designed to ensure the achievement of FSS 2020 Financial Markets initiatives § To assist in the resolution of issues relating to the collaborative efforts of implementing institutions towards the achievement of FSS 2020 Financial Markets initiatives. § To assist in the development, review and monitoring of standards, practices, procedures and policies towards the achievement of FSS 2020 initiatives. § To consult with the stakeholders on any proposed changes to the standards, practices, procedures or policies relating to the strategic objectives of FSS 2020 Financial Markets 4

Financial System Strategy 2020 FINANCIAL MARKETS FORUM MEMBERS The Forum is a key part of the implementation framework of the FSS 2020 Financial Markets Initiatives. The following Institutions are members of the Forum: § Central Bank of Nigeria § NDIC § Securities & Exchange Commission § Debt Management Office § Nigerian Stock Exchange § Nigerian Commodities Exchange § FIRS § Financial Reporting Council § FMDQ § CSCS § NASD § Investment and Securities Tribunal ( IST) § AFEX Commodity Exchange 5

ACTIVITIES OF INSTITUTIONS S/NO INSTITUTION 1. Nigeria Commodity Exchange (NCX) 2. Security and Exchange Commission (SEC) INITIATIVE STATUS Commodity contracts development Five agricultural commodity contracts namely maize, sorghum, soya beans, sesame seed and cocoa already developed for trading on NCX. Acquisition of warehouses for the smooth operation of the warehouse receipt system and concomitant liquidity on NCX Twenty warehouses obtained from the FMARD are already inspected but yet to be renovated. Additional twenty nine warehouses required to handle projected volume of transaction on the NCX Share Service issue - work to capture Microfinance Banks, incentives to promote listing, CBN intervention funds to CMOs, harmonize FM bills, Promote passage of Netting of Financial Contract Bill, support full disbursement of the N 10 B NMRC loan Payment System - Adoption of shared services across the Market FSS 2020 Strategy Execution Framework and Programme Management A Technical Committee is currently designing a framework for adoption of shared services in the Market Slide 6

ACTIVITIES OF INSTITUTIONS - Contd S/NO INSTITUTION INITIATIVE 3. NSE Deepen and Diversify Products, services and institutions to drive the Increased participation in Financial Markets Derivatives Green Bond FSS 2020 Strategy Execution Framework and Programme Management STATUS The NSE is working to deliver the legal, technological, and operational framework for creating, listing, and trading derivatives on the floor of the Exchange The NSE is working in tandem with the Federal Government in its plans to launch a N 20 billion Green Bond in the Nigerian capital market, the first ever in the emerging markets. The Bond will fund emission projects such as solar power systems and transport so as to achieve environmental sustainability goals of the government. It will also be used to fund part of the infrastructure projects outlined in the 2017 budget. Typically a green bond enables capital raising and investment for new and existing projects with environmental benefits. Slide 7

REVIEW OF FINANCIAL SYSTEM BILLS S/NO REVIEWED BILLS UPDATES 1 Securitization and Asset Backed Securities Bill not yet introduced to National Assembly. Still under review by FSS 2020 in conjunction with SEC. 2 Warehouse Receipt Regulation Bill had been passed by Senate. Awaiting similar concurrence from House of representatives 3 Mortgage Institutions And Allied Matters Bill had Passed first reading in Senate. However, it was recommended for the bill to be further reviewed to bring out the new proposed model mortgage law (MML)

NEXT STEPS • Improve engagement of high level discussion with stakeholders to drive the reform program and align the initiatives • Ensure regular quarterly forum meeting with stakeholders to review progress on the implementation of strategies • Continue collaboration for the passage of relevant financial system bills • Improve collaboration amongst stakeholders to deepen the bond market and the development of derivatives 9