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Cessation Procedure For the Nigerian Foreign Exchange Fixing (NiFEX)

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Thursday, April 27, 2018  04.20PM / FMDQ 

FMDQ OTC issued the following cessation and Activation procedures for NiFEX via a market notice on December 15, 2017 and January 02, 2018 respectively.
 

The cessation of NiFEX became effective from December 18, 2017.
 

Find Below the market notices.
 

CESSATION OF THE NIGERIAN FOREIGN EXCHANGE FIXING (NiFEX)
 
The Nigerian Foreign Exchange Fixing (NiFEX) is the reference rate for Spot Foreign Exchange (FX) operations in the Central Bank of Nigeria (CBN) Official Window, which comprises the CBN Secondary Market Intervention Sales (SMIS) or such other CBN-designated Official Intervention Window. NiFEX rates are FX reference rates intended to represent CBN Intervention rates and are generated independently through polling and published every business day at a specific time. NiFEX is currently used in the valuation of existing Legacy OTC FX Futures Contracts (i.e. open OTC FX Futures Contracts of December 2017 to March 2018). 

Following periodic review of its benchmark policies by FMDQ OTC Securities Exchange (FMDQ) in accordance with Principles 10 and 13 of the International Organisation of Securities Commissions Principles for Financial Benchmarks, FMDQ is considering ceasing the publication of the NiFEX rates upon maturity of all existing Legacy OTC FX Futures Contracts. Consequently, FMDQ hereby notifies all market participants of the activation of the proposed cessation procedure for NiFEX, as outlined in the table below:

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All market participants are invited to provide feedback on the proposed cessation of the NiFEX benchmark via email to the FMDQ Market Development Group (
mdg@fmdqotc.com), no later than 5:00 PM on January 2, 2018. 
 

ACTIVATION OF THE CESSATION PROCEDURE FOR THE NIGERIAN FOREIGN EXCHANGE FIXING
 
This Market Notice is issued in furtherance of Market Notice (MN-14) dated December 15, 2017, notifying all market participants of the activation of the proposed cessation procedure for the Nigerian Foreign Exchange Fixing (NiFEX). 

In consideration of feedback received from various stakeholders, FMDQ OTC Securities Exchange (FMDQ) hereby notifies market participants of the following:
 

1. The final calculation and publication cessation date for NiFEX has been extended to Monday, December 31, 2018. This will afford all stakeholders ample time to align their foreign exchange (FX) transactions with alternative reference rates in the Nigerian FX market, such as, the Nigerian Autonomous Foreign Exchange Fixing (NAFEX).
 

2. Consequently, NiFEX will no longer be published on the FMDQ website from Tuesday, April 3, 2018, but will be made available to market participants based on request only via the FMDQ e-Markets Portal and through FMDQ Data Distribution Vendors (e.g. Thomson Reuters and Bloomberg L.L.P) from Tuesday, April 3, 2018 to Monday, December 31, 2018, after which, FMDQ will cease to provide the reference rate entirely.
 

In line with the above, FMDQ hereby notifies all market participants of the activation of the cessation procedure for NiFEX, as revised in the table below:

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Market participants are hereby advised to apply alternative benchmarks such as NAFEX, which is the reference rate for Spot FX transaction in the Autonomous FX Market. Details of the NAFEX benchmark can be found at the following link:
https://www.fmdqotc.com/markets/methodologies/

To access the FMDQ e-Markets Portal, please contact the FMDQ Business Origination Team –
bog@fmdqotc.com  for further details.

Please be guided accordingly.
 

Should you have any question(s) about this Market Notice, please do not hesitate to contact the FMDQ Market Development Group at
mdg@fmdqotc.com


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