Codified Rule Book for FGN Bonds

November 2013

Table of Contents
Introduction...................................................................................................................................................................................................................................... 5 Two-Way Quote............................................................................................................................................................................................................................... 6 Codified Rule Book for FGN Bonds ............................................................................................................................................................................................... 7 General Standards ..................................................................................................................................................................................................................... 7 Powers Exercisable ................................................................................................................................................................................................................ 7 Committees ............................................................................................................................................................................................................................. 7 Rule Interpretation ................................................................................................................................................................................................................ 8 Rule Applicability .................................................................................................................................................................................................................... 8 Rule Amendments ................................................................................................................................................................................................................. 8 Authorisations & Approvals for Membership ......................................................................................................................................................................... 9 Eligibility Criteria .................................................................................................................................................................................................................... 9 Reporting Requirements ..................................................................................................................................................................................................... 11 Technical Requirements...................................................................................................................................................................................................... 14 Customer Requirements ..................................................................................................................................................................................................... 16 Organisation Requirements ................................................................................................................................................................................................ 18 Application Process .............................................................................................................................................................................................................. 21 Termination of membership (Suspension and Revocation of Licence)........................................................................................................................ 22 Notice to Members .............................................................................................................................................................................................................. 23 Obligations &Rights ................................................................................................................................................................................................................. 24 2

Market Making ...................................................................................................................................................................................................................... 24 Manipulative or other Fraudulent Devices ....................................................................................................................................................................... 27 False, Misleading or Deceptive Statements ..................................................................................................................................................................... 28 Operational Privileges ......................................................................................................................................................................................................... 29 Trading & Execution ................................................................................................................................................................................................................ 30 Types of Transactions ......................................................................................................................................................................................................... 30 Trading Hours....................................................................................................................................................................................................................... 31 Trading Parameters ............................................................................................................................................................................................................. 31 Best Execution ...................................................................................................................................................................................................................... 33 Trading Halt .......................................................................................................................................................................................................................... 34 Other Trading Practices ...................................................................................................................................................................................................... 34 Performance Evaluation ...................................................................................................................................................................................................... 36 Clearing & Settlement ............................................................................................................................................................................................................. 38 Trade Reporting ................................................................................................................................................................................................................... 38 Trade Confirmation.............................................................................................................................................................................................................. 39 Trade Processing ................................................................................................................................................................................................................. 40 Trade Settlement ................................................................................................................................................................................................................. 41 Dispute Resolution................................................................................................................................................................................................................... 42 Mediation .............................................................................................................................................................................................................................. 42 Arbitration ............................................................................................................................................................................................................................. 44 Definition of Terms ....................................................................................................................................................................................................................... 45 Key Definitions ............................................................................................................................................................................................................................... 47 3

Reference ....................................................................................................................................................................................................................................... 48 Appendices ..................................................................................................................................................................................................................................... 49 Appendix One - Two-Way Dealing Systems Dispute Form ............................................................................................................................................... 49 Appendix Two Contract Letter Format for Sale of FGN Bonds ....................................................................................................................................... 51 Appendix Three - Contract Letter Format for Purchase of FGN Bonds ........................................................................................................................... 54 Appendix Four - Letter Format to CSCS Requesting Transfer of Bonds.......................................................................................................................... 56 Appendix Five - Letter Format to CSCS Requesting Transfer of Funds ........................................................................................................................... 59 Appendix Six Acceptance and Commitment Letter ......................................................................................................................................................... 62 Appendix Seven Details of FGN Securities Sold on Repo Basis to other Parties ........................................................................................................ 64 Appendix Eight Details of FGN Securities Bought on Repo Basis from other Parties ................................................................................................ 64 Appendix Nine Holdings of FGN Bonds by Foreign Investors ........................................................................................................................................ 64

Introduction These guidelines set out the market operations standards for the Federal Government of Nigeria (FGN) bond market. The participants of this market, being the Debt Management Office (DMO)-licensed Primary Dealer/Market Makers (PDMMs)(comprised of banks, discount houses and merchant bank)and the FMDQ-approved Market Makers (which are mostly banks) have chosen to deal on the FMDQ OTC securities exchange. This document contains existing regulations and rules from DMO, Securities & Exchange Commission (SEC), Central Bank of Nigeria (CBN) and Financial Markets Dealers Association (FMDA) which are being adopted as FMDQ preliminary rules. For the purpose of these guidelines, the DMO licenced Primary Dealer Market Makers (PDMMs) and FMDQ-approved Market Makers will be referred to as trading members. The Exchange intends to re-work some parts of these rules after its launch. These rules will provide a reference for market practices relevant to the Nigerian operating and regulatory environment. They shall be binding on all FMDQ trading members who shall subscribe to them in their bond trading activities. Control of the activities of all personnel engaged in dealing (both dealers and support staff in sales, market risk, operations, compliance, internal control and audit functions) is the responsibility of the management of such organisations. These rules are therefore addressed, not only to dealers, but also to the management and to relevant operational support staff. Management should clearly set out in writing, the authorities and responsibilities within which dealing and support staff should operate. These might include: General dealing policy including reporting procedures Persons authorised to deal Products to be dealt in Risk management (counterparty, position and stop-loss limits etc.) and internal controls Confirmation and settlement procedures Relationships with member firms Other relevant guidelines as considered appropriate

Management should also ensure that individual dealers are aware of their responsibilities to act professionally at all times, understand and operate within the legal & regulatory requirements applicable to the transactions they undertake. Currently, the FGN bonds are being traded on two-way quote basis. Whilst, rump stock bonds trade on one-way quote basis, indicative prices are provided for illiquid FGN bonds in the Nigerian Inter-bank OTC market.

Two-Way Quote The two-way quote dealing system is a system where a dealer gives both binding buying (bid) and selling (offer) prices on the same quote. This means the dealer is willing to buy at his bid and sell at his offer if the counterparty so pleases. Benefits of the Two-Way Quote Trading System Liquidity Price Discovery Market Depth Transparency International best practices Efficient and vibrant secondary market Indicative Price An indicative price is provided by trading members for the rump stock and short-dated bonds.FGN bonds that have less than N30bn in issue are regarded as rump stock bonds whilst short-dated FGN bonds have less than one year term to maturity. Although, trading members are not obligated to trade at the indicative prices, they may serve as a reasonable estimate of the price at which trading members can start their bond trading activities.

Codified Rule Book for FGN Bonds Rule Section General Standards Rule Sub-Section Powers Exercisable Rule Code 4111 i. Rule The SEC andDMO shall be responsible for monitoring the activities of PDMMsin the secondary market for FGN Securities The FMDQ OTC PLC (FMDQ) may suspend members acting in a manner contrary to these rules from dealing in the two-way quote market The suspension, which will be preceded by a written warning, mayarise if cases of misconduct are established against the erring party, Provided that any member shall be suspended without a warning, if the misconduct is grievous. The period of suspension may not exceed six calendar months FMDQs Executive Regulation & Supervision Committee and the FMDQ Board Regulation & Supervision Committee shall rule on disputes/infractions referred to it by trading member, customer or the Market Surveillance Unit of FMDQ on matters relating to dealing relationships, market standards and conduct of the trading members Reference DMO Detail GRRS Sec. IIIb(1) GTFB Sec. 1.3

4112

i.

FMDQ

ii.

iii.

Committees

4121

i.

FMDQ

Rule Section

Rule Sub-Section Rule Interpretation

Rule Code 4131 i.

Rule These rules shall be read in conjunction with, and shall not be superior to any Laws, Decrees and Enactments of the Federal Republic of Nigeria or any directive(s) of the CBN, DMO, SEC and other regulatory and monetary authorities

Reference FMDQ

Detail GTFB Introduction

Rule Applicability

4141

i. These rules seek to establish a framework within which trading members(PDMMs and other banks) can trade FGN bonds and develop a viable fixed income market in Nigeria i. FMDQ shall file with and obtain approval of the SEC, any proposed amendment, repeal of or any addition to its rules before any action is taken on such amendments, repeal or addition by its members or by any governing body thereof.

FMDQ

GTFB Introduction

Rule Amendments

4151

SEC

SRR Sec. 192(1)

4152

ii. FMDQ shall notify DMO and CBN of all proposed amendment or repeal or addition to its rules

FMDQ

Rule Section

Rule Sub-Section

Rule Code 4221

Rule

Reference FMDQ

Detail GTFB Sec. 1.1

Authorisations Eligibility & Approvals Criteria for Membership

i. ii.

iii. iv. v.

Trading members shall possess a valid licence A prospective applicant shall be in full compliance with the requirements set forth by its regulator(s) before being considered for a PDMM licence by the DMO A prospective PDMM shall not be in violation of any rules and regulations of its regulator Demonstrate capacity to fulfill the Reporting, Technical, Organisational and Systemic& Procedural requirements as stated in these Rules Notwithstanding the minimum capital requirement prescribed by any regulator, the minimum required from a prospective PDMM is N3billion in Shareholders Fund, unimpaired by losses and excluding Revaluation Surplus, as at the last financial year-end before the date of application. This requirement must be supported by the Audited Accounts of the prospective PDMM.

4222

The applicant institution (Non-PDMMs) shall; i. ii. be registered by SEC and FMDQ have a minimum shareholders funds unimpaired by losses and excluding

Rule Section

Rule Sub-Section

Rule Code

Rule revaluation reserves of N2billion as at the last financial year prior to the date of application sign up to the FMDQ two-way quote agreement and be ready to be bound by all the terms and conditions therein have a settlement bank in place which shall be one of the approved Primary Dealers for bonds trade directly with trading member in the twoway quote market have a minimum of 2 SEC registered dealers to trade in bonds have a Market Risk function in place with a designated Head of market risk registered with SEC undergo an interview process before it can be admitted as a member. The 2 SEC registered dealers and market risk officer shall be part of the interview.

Reference

Detail

iii. iv. v. vi. vii. viii.

FMDQ will undertake a site visit to the dealing rooms of the applicant institution to ensure compliance with all requirements

4223

i.

PDMMs that are appointed by the DMO are

DMO

GRRS Sec.

10

Rule Section

Rule Sub-Section

Rule Code

Rule obliged to quote in the two-way quote trading system. Banks and Discount Houses who are nonPDMMs but have signed up to the FMDQ twoway quote bond trading system See Acceptance and Commitment Letter (contained in Appendix Six) Trading members shall maintain such accounting and other records of their respective activities in the primary and secondary markets as set forth by the DMO and their respective regulators Trading members shall file the reports in (a-b) below in an electronic form, with SEC and the DMO, within five (5) working days following the month under review: a. Monthly position statements for the PDMMs trading account based on total holdings, by trade date, of FGN Securities in the following categories: i. Bonds maturing in 3 years or less ii. Bonds maturing between 3+ years and 5 years iii. Bonds maturing between 5+ years and 10 years iv. Bonds with maturities of 10+ years

Reference

Detail 2c (1) & (4)

ii.

Reporting Requirements

4231

DMO

GRRS Sec. IVA(1)

4232

DMO

GRRS Sec. IVA(2)

11

Rule Section

Rule Sub-Section

Rule Code

Rule b. Monthly secondary market trading activities in the PDMMs trading account with counterparts in the following categories: i. Purchases and Sales with other PDMMs ii. Purchases and Sales with non-PDMM banks and discount houses iii. Purchases and Sales with Pension Funds iv. Purchases and Sales with other domestic clients; and, v. Purchases and Sales with foreign institutions

Reference

Detail

4233

Trading members shall submit a monthly report to the SEC and DMO of Repo transactions undertaken by them for each month within five (5) working days of the end of each month in the format shown in appendices 8 & 9 Trading members including those acting as custodians for foreign investors who participate in the domestic FGN Securities market, shall file with the SEC and DMO, monthly bond holding positions by foreign investors for transactions in the primary and secondary markets within five (5) working days of the end of each month, as shown in the appendix 9

DMO

GRRS Sec. IVA(3)

4234

DMO

GRRS Sec. IVA(4)

12

Rule Section

Rule Sub-Section

Rule Code 4235

Rule Trading members shall file with the DMO, within one (1) week of each auction, its Subscription and Allotment at the Auction detailing participation by: i. Own account ii. Banks iii. Discount Houses iv. Pension Funds v. Other Non-Bank Financial Institutions vi. Governments and Government Agencies vii. Foreign Investors viii. Other Institutions ix. Individuals x. Any other Report that may be requested by the DMO from time to time i. Trading members shall comment or make recommendations on policies, market conditions or other matters that relate to the FGN Securities market on approval of DMO. Dissemination of such requests outside the bond trading department is forbidden Trading members shall not make public highly confidential information concerning any government statistics or policies. The receipt of confidential information from any unauthorised source shall be reported to the trading members

Reference DMO

Detail GRRS Sec. IVA(5)

4236

DMO

GRRS Sec. X(1)

4237

i.

DMO

GRRS Sec. X(2)

13

Rule Section

Rule Sub-Section

Rule Code

Rule management and immediately reported to the DMO by the appropriate PDMMs officer

Reference

Detail

4238

i.

Failure to comply with these mandates or the dissemination of confidential information may result in disciplinary action by the DMO and other appropriate authorities

DMO

GRRS Sec. X(2)

Technical Requirements

4241

Trading members, for the purpose of trading in FGN Securities, shall provide for the following: i. Trading and Sales Office with designated office space for Trading and Sales Officers (Treasury Client Relationship Managers); and ii. Customer Service locations Trading members shall have communications equipment consistent with maintaining communications with the DMO, other PDMMs and customers: i. Interconnected telephone system with at least two (2) lines per trader, sales officer(s) and one (1) GSM line per dealer ii. E-mailing systems iii. Computers, printers, scanners and photocopiers iv. Financial calculators or programmes for calculating securities prices and Yield-To-

DMO

GRRS Sec. IVB(1)

4242

DMO

GRRS Sec. IVB(2)

14

Rule Section

Rule Sub-Section

Rule Code

Rule Maturity v. Trading and data screen capabilities

Reference

Detail

4243

i.

Trading members shall have internal technical capabilities for providing current and accurate information to Management, Traders, Salesmen, the DMO and, other regulatory authorities. Such information shall include, but not limited to: Daily Inventory Position Daily Profit and Loss Daily Mark-to-Market Valuation Trading Activity Customer Activity Credit review of current open trades with counterparties

DMO

GRRS Sec. IVB(3)

4244

Trading members are under obligation to report and record their holdings and trading activities in FGN Securities in a manner consistent with the provisions of the accounting standard(s) that may be prescribed by their respective regulators from time to time i. Trading members shall make their books open to the SEC and DMO who shall periodically embark on on-site inspections to trading members offices to ascertain compliance with the stated criteria

DMO

GRRS Sec. IVB(4)

4245

DMO

GRRS Sec. IVB(5)

15

Rule Section

Rule Sub-Section

Rule Code ii.

Rule The DMO may employ the services of a thirdparty such as the CBN, to conduct on-site inspections on its behalf Trading members shall be given fourteen (14) days within which to rectify any violation in this section, and if found unsatisfactory, the DMO may invoke the actions stated in Rule 4472

Reference

Detail

iii.

Customer Requirements

4251

Trading members primary contact with a customer shall be through a Sales Officer. Trading members shall have full responsibility for the actions of its Sales Officers Trading members shall not refuse a request to bid at an auction or give a quote for FGN Securities from customers, provided such customers meet their customer selection or acceptance criteria including due diligence requirements Trading members shall comply with the following rules for customer activities: i. All information concerning customer activity is confidential and should not be provided to any party outside the individual trading member with the exception of fulfilling the appropriate reporting requirements or demands of regulators

DMO

GRRS Sec. VI(1)

4252

DMO

GRRS Sec. VI(2)

4253

DMO

GRRS Sec. VI(2)

16

Rule Section

Rule Sub-Section

Rule Code

Rule and/or a court of law ii. For secondary market trades where the customer is not part of the two-way quote market, sales officers shall make requests for customers bids and/or offers to the appropriate traders. They are required to relay the prices given by the traders to the customer and immediately provide the customer's response back to the trader iii. The flow of prices and information shall be without delay. The sales officer represents the customer for this purpose and must accurately reflect all requests and responses to the traders in a timely fashion iv. A sales officer is not allowed to bid at an auction on behalf of a customer or trade for a customer's account without proper authorisation by the customer v. Standing orders may be placed by the customer and be subsequently filled by the trader, but the completion of the trade must be reported immediately to the customer and the transaction details confirmed within twenty four (24) hours by a means mutually accepted by the trading member and the customer vi. A trading member may decline a customers request where the customer has not complied

Reference

Detail

17

Rule Section

Rule Sub-Section

Rule Code

Rule with the trading members internal policies or procedures such as Know Your Customer (KYC) policy or where no limit (cash or credit) has been established for the customer or the request will lead to an excess in the customers limit vii. A refusal to bid for or trade with a customer should be made only after the deadline to bid or trade with the customer has been approved by the trading members management and the reason(s) should be disclosed to the customer

Reference

Detail

Organisation Requirements

4261

At the beginning of each calendar year, trading members shall provide the SEC and DMO with an organisational chart of its Bond Trading Department (Group or Division as may be applicable) and the names of individuals with management responsibilities for bond investments and trading activities. This list shall include the following: i. All individuals with oversight responsibilities for investment and trading activities related to FGN Securities ii. All individuals with authority to trade (buy or sell) FGN securities, including the manager of the relevant department; and iii. The manager for clearing and settlement operations

DMO

GRRS Sec. VI A(1)

18

Rule Section

Rule Sub-Section

Rule Code 4262

Rule Organisation Structure Trading members shall report any changes in the organisational chart and personnel to the SEC and DMO, within seven (7) working days of assumption of duty by such staff Trading members shall not employ any individual who has been sanctioned in activities relating to the FGN securities market, or barred from securities investing or trading activities by any regulatory authority including those regulators listed in Rule 4221 (i) Ownership and Board A trading member shall advise the DMO in writing of material changes in its ownership and Board within 14 days of their occurrence

Reference DMO

Detail GRRS Sec. VI A(2)

4263

DMO

GRRS Sec. VI A(3)

4264

DMO

GRRS Sec. VI C

19

Rule Section

Rule Sub-Section

Rule Code 4265

Rule Systems and Procedures i. A trading member shall have policies and procedures for creating limits and monitoring same for self, customers and its FGN securities traders. These include: a. Credit policy that describes procedures for establishing limits with customers including limits on repurchase agreements on a per customer or counter-party basis b. Risk Policy procedures for establishing institutional position limits in FGN Securities, and c. Risk Policy procedures for establishing individual traders position limits in FGN Securities ii. Policy on documentation and other procedures required for bidding for and trading with counterparties iii. Compliance policy that establishes a system of monitoring institutional and individual compliance to guidelines or circulars on investment and trading in FGN Securities by their respective regulatory authorities, as well as in-house policies and procedures

Reference DMO

Detail GRRS Sec. VI B(1-3)

20

Rule Section

Rule Sub-Section Application Process

Rule Code 4271 i.

Rule Eligible institutions who wish to become PDMMs in FGN securities may apply to the DMO or in the cases where the DMO invites applications from interested parties, respond to such invitations in the prescribed format ii. Applicants shall meet the following criteria and others that may be prescribed by the DMO from time to time: a. be rated a minimum of B+ (or its equivalent) by any of the recognised international rating agencies (Standard and Poors, Fitch or Moodys) or any other rating agency recognised by SEC b. Participation in the primary and secondary markets for FGN Securities including the twoway quote market would be an advantage iii. The acceptance of an application and the issuance of a PDMM licence for FGN Securities is at the sole discretion of the DMO i. An applicant for membership or authorisation to perform one or more services shall apply to the FMDQ in the form and manner prescribed by the FMDQ The application shall be accompanied by an application fee prescribed by the FMDQ an

Reference DMO

Detail GRRS Sec. XI A(1)

4272

FMDQ

IIMMA Sec. 2.7

ii.

21

Rule Section

Rule Sub-Section

Rule Code

Rule approved by SEC. Where FMDQ requires the applicant to provide further information it may forward a request to the applicant to supply the information. The request may include that one or more representatives of the applicant be interviewed by the FMDQ FMDQ has the sole discretion to accept or reject the application, or to accept an application subject to certain conditions being met FMDQ shall notify the applicant in writing of its decision and of any conditions that are required to be met An institution aggrieved by a decision of the FMDQ to reject an application to be admitted as a member may appeal to the Board of FMDQ .

Reference

Detail

iii.

iv.

v.

vi.

vii.

Termination of membership (Suspension and Revocation of Licence)

4281

Without prejudice to the provisions contained in this Rule, the DMO may suspend or revoke the licence of a PDMM for any of the following reasons: i. Where the PDMM is classified as financially distressed or having poor corporate governance by its regulator ii. An intervention by a regulator or regulators in the PDMM due to adverse developments in the PDMM

DMO

GRRS Sec. XI B(1)

22

Rule Section

Rule Sub-Section

Rule Code

Rule institution iii. For the avoidance of doubt, a PDMMs licence is automatically revoked, suspended or withdrawn, once the licence issued by one or more of its regulators is revoked, suspended or withdrawn.

Reference

Detail

Notice to Members

4291

i. FMDQ shall file with the SEC before issuing to trading members a copy of any notice, circular, list, bulletin etc. ii. Such notices, circulars, lists, bulletins etc. shall be addressed to Director-General and delivered at SECs head office iii. Where SEC does not respond to the said material within 5 working days of the receipt thereof, FMDQ may issue it to its trading members A facsimile or other electronic copy of such notice may be sufficient provided that there is evidence of receipt

SEC

SRR Sec. 186(1-4)

23

Rule Section Obligations &Rights

Rule Sub-Section Market Making

Rule Code 4311

Rule

Reference DMO

Detail GRRS Sec. IIIb (2 - 12)

i. PDMMs shall make markets in FGN securities on request, following the "Secondary Market Making Rules" (two-way quote Market) as established by the DMO in consultation with the PDMMs ii. PDMMs shall make on demand, and in all conditions, continuous and effective two-way quote prices to all PDMMs and non-PDMMs iii. However, PDMMs are not obligated to quote prices to customers for whom they have not completed due diligence iv. Only PDMMs and any other financial institutions while operating in the two-way quote market for FGN securities may trade through duly registered "Intermediaries" (Inter-Dealer Brokers) v. A PDMM shall maintain a minimum level of secondary market activity (excluding Repos) measured in terms of the Total Nominal Value of securities traded and the Total Number of Trades vi. Each PDMMs activity shall equal at least 60% of its proportional share of these two parameters, over a rolling six month period vii. A PDMM shall publish representative price quotes on its corporate website or other public place on a daily basis

24

Rule Section

Rule Sub-Section

Rule Code viii.

Rule A PDMM is expected to sign-up and be connected to duly registered trading infrastructure and platforms that may be introduced from time to time for the buying and selling of securities A PDMM is encouraged but not under obligation to give two-way quote in FGN Securities that have been designated as rump or illiquid A PDMM is allowed to vary his Bid and/or Ask for prices where the request is for a transaction outside the standard parameters (such as size and settlement date) specified in the Secondary Market Making Rules as established by the DMO in consultation with the PDMMs PDMMs shall comply with the following: No commission or fee shall be received by or paid to a PDMM or customer(s) for activities in the secondary market except Inter-Dealer Brokers FGN securities shall be traded on the Over-theCounter (OTC) Market. However, where the securities are listed on the Nigerian Stock Exchange (NSE), transactions on the NSE are permitted

Reference

Detail

ix.

x.

xi. a.

b.

25

Rule Section

Rule Sub-Section

Rule Code

Rule Trading shall be amongst the PDMMs and between themselves and non-PDMM institutions or individuals

Reference

Detail

4312

Quoting trading members shall: i. give two-way quote on FGN bonds for standard amount, without undue delay, during trading hours ii. refrain from quoting for amounts lower than the standard amount iii. state the amount it is willing to quote for if the calling party request a quote for an amount higher than the standard amount iv. deal, for at least the standard amount, if calling party finds one of its quotes attractive v. give two-way quote for all FGN bonds issued from July 2006 except rump stocks declared by the DMO Calling trading members shall: i. decide promptly what to do on the quote supplied by the quoting party, during trading hours ii. deal with a quoting trading member as many

FMDQ

GTFB Sec. 1.4.1

4313

FMDQ

GTFB Sec. 1.4.2

26

Rule Section

Rule Sub-Section

Rule Code

Rule times as it desires during trading hours iii. close one deal (sell or buy) per quote, if it finds one of the quoting trading members rates attractive iv. reserve the right not to deal if it finds the quotes unattractive v. not be obliged to give quotes to quoting trading members at that instance. However, if it shall oblige and quote, it must deal if quoting trading members finds its quote attractive

Reference

Detail

Manipulative or other Fraudulent Devices

4321

i. Customer Inducements - PDMMs personnel are forbidden from giving or receiving any form of compensation, monetary or otherwise, as inducement to bid at auctions or complete a trade for a customer ii. Manipulation - PDMMs shall not engage in activities, which are intended to manipulate market prices or obstruct the efficient functioning of the market iii. Personal Trading - The PDMMs Bond Traders are restricted from any personal trading or investment activity in FGN Securities in the secondary market without prior notice being given to and approval received from the Traders Compliance Officer. Ownership interests in

DMO

GRRS Sec. XI (1 & 2)

27

Rule Section

Rule Sub-Section

Rule Code

Rule equities, bonds, mutual funds or other financial instruments shall be reported to the Trader's Compliance Officer iv.Collusive Activities - Traders and Sales Officers are strictly prohibited from activities with other PDMMs, customers, and individuals within the FGN Securities market resulting in transactions that do not reflect proper market practices

Reference

Detail

4322

i. All persons engaging in activities which jeopardise the efficiency of the marketplace shall be proceeded against in accordance with the provisions of the Investments and Securities Act (ISA), 2007 (The Act), as may be amended from time to time, and other applicable laws. In addition, the DMO may bar the individual from participating in the market for FGN securities. Where it is the corporate body, its PDMM license may be revoked i. Trading members and their personnel are prohibited from making any statements or engaging in any activity, which could negatively impact the FGN Securities market ii. Market Misrepresentation - Trading members personnel shall not disseminate rumours or false

DMO

GRRS Sec. XI (3)

False, Misleading or Deceptive Statements

4331

DMO

GRRS Sec. XI (1 & 2)

28

Rule Section

Rule Sub-Section

Rule Code

Rule information about the market, price levels or market participants

Reference

Detail

Operational Privileges

4341

i. PDMMs shall be the preferred counterparty for DMOs secondary market activities, the DMO shall only deal with PDMMs in the FGN securities secondary market i. Trading members shall automatically, subject to signing the required agreements with an InterDealer Broker (IDB), have trading and viewing access to the services of duly registered IDB firms which will enable them to unwind or acquire positions with each other and other institutions who are part of the two-way quote System i. PDMMs are automatically invited to send a representative to the DMOs periodic consultation meetings on the FGN Securities market once appointed i. The DMO may regularly schedule meetings with PDMMs for the purpose of receiving inputs into

DMO

GRRS Sec. XII A (5)

4342

DMO

GRRS Sec. XII B (1)

4343

DMO

GRRS Sec. XII B (2)

4344

DMO

GRRS Sec. XII B (3)

29

Rule Section

Rule Sub-Section

Rule Code

Rule its debt management plans and strategies regarding future debt issuance, new products and general operations of the FGN Securities Market

Reference

Detail

4345

i. A PDMM automatically becomes a member of the Trade Group Primary Dealer Market Makers Association (PDMMA), a self-governing body that represents the PDMM communitys interests in the wider market place and with other regulators

DMO

GRRS Sec. XII B (4)

Comment: the trading members are now governed by FMDQ, a SEC-registered Self-Regulatory (SRO)
Trading & Execution Types of Transactions 4411 Outright Purchase/Sale Transaction The purchase (or sale) of a bond (Government securities) in exchange for cash on settlement dates Repo (Repurchase Agreement) i. A repurchase agreement is an agreement in which the bond is sold and later bought back at an agreed or predetermined price ii. A repo is a borrowing or funding transaction whereby the first party borrows money from the second party, using the asset as collateral iii. At the end of the agreed period the first party repays the second party, the repo interest and FMDQ GTFB Sec. 2.1 GTFB Sec. 2.2

4412

FMDQ

30

Rule Section

Rule Sub-Section

Rule Code

Rule repurchases the asset iv. Repo tenor can be any number of days and the bond term to maturity does not necessarily need to conform to the tenor of the repo but the bonds outstanding tenor shall be longer than the repo tenor v. The tenor of the repo transaction shall be calculated from the value date

Reference

Detail

Trading Hours

4421

Trading hours shall be between 9.00am - 4.00p.m. (current practice is 10.00am 2.00pm) every working day Standard Amount i. N50m shall represent the standard amount trading members must be ready to deal each time a quote is given (current practice is that

FMDQ

GTFB Sec. 1.11

Trading Parameters

4431

FMDQ

GTFB Sec. 3.1

standard amount for the trading of FGN bonds with volume greater than N30bn is N100m)

ii. Where amounts required are not specified upfront, quotes will be assumed to be for the standard amount and confirmed as such iii. However, the standard amount may be revised by FMDQ as the market evolves

31

Rule Section

Rule Sub-Section

Rule Code 4432

Rule Specified Amount i. Where the calling party requests for a quote for an amount larger than the standard amount, the calling party shall state the exact amount upfront ii. The quoting party may decline to quote for such an amount and shall specify the amount it is willing to quote, for which must be the standard amount or higher Rump stock & short- dated bonds i. Trading members may quote indicative prices for bonds with amount less than N30bn in issue otherwise known as rump stock bond ii. Trading members may quote indicative prices for bonds with less than one year term to maturity otherwise known as short-dated bonds Spread i. The maximum spread between the bid and offer rates for outright transactions will be as follows: c. Up to 3 years = 25bps (current practice d. 3yr

Reference FMDQ

Detail GTFB Sec. 3.2

4433

Market Practice

4434

FMDQ

GTFB Sec. 3.4

=15bps)

e. 5yrs

practice=30bps)
to

to

5yrs 7yrs

= =

25bps 25bps

(current (current

32

Rule Section

Rule Sub-Section

Rule Code f.

Rule

Reference

Detail

practice=30bps) 30bps)

7yrs to 10yrs = 25bps (current practice =

g. 10yrs to 20yrs =(current practice = 30bps) Quotes shall be obliged to market participants on prices with two decimal places. e.g. 99.50/99.80 (bid and offer respectively) 4435 The maximum spread for rump stock and short-dated bonds shall be as follows: Rump stock bonds: i. 3yrs = 50bps ii. 5yrs 20yrs = 100bps Short-dated bonds: i. <1yr = 50bps (Current practice is that there are no fixed spreads for rump stock and short-dated bonds) Validity of Quotes i. Quotes given are only valid for that phone call ii. Quotes given shall be valid for a minimum of 20 seconds (market flash quote) for telephone and screen-based transactions FMDQ

Best Execution

4441

FMDQ

GTFB Sec. 1.7

33

Rule Section

Rule Sub-Section Trading Halt

Rule Code 4451

Rule FMDQ may declare a trading halt in circumstances where trading activity: i. is being or could be undertaken by persons possessing unpublished price-sensitive information that relates to that security ii. is being influenced by a manipulative or deceptive trading practice; or iii. may otherwise give rise to an artificial price for that security iv. where the bond market becomes illiquid due to some external event Mode of Communication Dealing shall be done on the telephone or through any on-line screen-based dealing system approved by FMDQ Concluding a Deal i. Dealing in the two-way quote system will be on the basis of Clean Price ii. Dealers shall regard themselves as bound to a deal once the price and volume have been agreed iii. A deal is consummated when the requesting trading member confirms buying or selling the standard amount or any other amount quoted for

Reference FMDQ

Detail IIMMA Sec. 4.5

Other Trading Practices

4461

FMDQ

GTFB Sec. 1.5

4462

FMDQ

GTFB Sec. 1.6

34

Rule Section

Rule Sub-Section

Rule Code

Rule at the bid or offer rate indicated by the quoting party iv. After quoting a rate, a quoting trading member cannot refuse to deal if the requesting trading member decides to buy or sell at either of the rates quoted v. To reduce the incidence of disputes, dealers are advised to reconfirm transaction details vi. If no amount is stated before the quote is given, then the quote shall be assumed as given for the standard amount vii. If a trading member requests quote for an amount higher than the standard amount and this amount is stated ahead of the quoting party giving the quote, it shall be assumed that the quote was given for the amount stated and the quoting party is obliged to deal

Reference

Detail

4463

Voice Recording Facility i. To expedite conflict resolution, the use of voice recording facilities in the trading offices of all parties is compulsory ii. It is mandatory that all conversations shall be recorded iii. Tapes shall be kept for at least two months after

FMDQ

GTFB Sec. 1.9

35

Rule Section

Rule Sub-Section

Rule Code

Rule the settlement dates of the contracts iv. Tapes containing disputed transactions shall be retained until the problem has been resolved

Reference

Detail

Performance Evaluation

4471

i. The DMO shall review the primary and secondary market activities of the PDMMs semi-annually, or at other intervals that the DMO may decide, and determine if individual PDMMs are fulfilling their primary and secondary market obligations

DMO

GRRS Sec. IIIC

36

Rule Section

Rule Sub-Section

Rule Code 4472

Rule The performance evaluation shall be the primary basis for the recognition of excellence or sanctions as detailed in the following sections i. Sanctions: Non-compliance may result in the following actions ii. Caution Notice: A PDMM shall be given a 30-day notice within which to explain any violations of their market obligations, and another 30 days within which to rectify same. If the explanation is unsatisfactory or rectification is not done within the specified period, the DMO may suspend or revoke the PDMMs license iii. Suspension of PDMM Status: The period of suspension shall be determined by the DMO and shall not be rescinded without formal renewed commitment to fulfilling the primary and secondary requirements by the suspended PDMM iv. Revocation of PDMM Status: The PDMM status may be revoked and, re- issuance of the PDMM licence may be permitted after twelve (12) calendar months or such other period that the DMO may determine after a formal application would have been made by the affected PDMM v. The reinstatement of the licence is solely at the discretion of the DMO

Reference DMO

Detail GRRS Sec. IIIC (a-b)

37

Rule Section Clearing & Settlement

Rule Sub-Section Trade Reporting

Rule Code 4511 i.

Rule Trading members shall open accounts with the FGN bond depository i.e. Central Securities Clearing System (CSCS) Trading members shall submit settlement instructions to the CSCS before 12 noon on settlement day (current practice is that Post-

Reference FMDQ

Detail GTFB Sec. 3.5

ii.

Trade Module (PTM) ensures straight-through processing by capturing and sending trades information to CSCS for settlement. However, the trades are not being reported in a timely manner)
iii. The standard settlement date is T+2, i.e. 2 days after trade date. However trading members may settle on the trade date (T+0) or any day mutually agreed The instruction shall be signed according to the mandate of the trading member and contain the following details: Security Bond Maturity Date Coupon Bond Seller Bond Buyer Trade Date Settlement Date Number of Units of the bond

iv.

38

Rule Section

Rule Sub-Section

Rule Code -

Rule Face Value Dealers References Clean Price Notional Full/Dirty Price Amount Payable

Reference

Detail

Trade Confirmation

4521

i. Verbal agreements shall be binding. Subsequent written confirmation is regarded as evidence of the deal, but should not override terms agreed verbally ii. Confirmations (whether mailed, telexed or sent by other electronic means) provide an opportunity for dealing errors to be identified and rectified with minimum delay and possible cost. Standard confirmation letters shall be exchanged within 24 hours iii. Upon receipt, all confirmations shall immediately be thoroughly checked and appropriate action taken to rectify any differences iv. If the confirmation is considered incorrect, the trading members shall be informed immediately and an amended confirmation shall be provided by the trading member whose original

FMDQ

GTFB Sec. 1.8

39

Rule Section

Rule Sub-Section

Rule Code

Rule confirmation was incorrect v. Any trading member that fails to receive a confirmation shall query the matter with the counterparty as soon as possible. vi. CSCS shall check that the bonds to be sold are in the bond position of the seller

Reference

Detail

(Current practice is that trade confirmation is done via telephone or electronic platform on trade day. Trading members upload trade details from their blotters into PTM that ensures straight-through processing to CSCS. CSCS advises CBN after trades have been matched successfully)
Trade Processing 4531 i. Where bonds are confirmed to be in the sellers bond position, they shall be transferred to the buyers bond position. The charge payable to CSCS for this function is N1 per 1million Following this, a copy of the sellers settlement letter shall be forwarded to the Registry & Depository Office (formerly Issues Office) of the CBN with confirmation that the bonds transfer was successful. The deadline by which the CSCS forwards settlement letters to the CBN is 2.30pm on T+1 FMDQ GTFB Sec. 3.5

ii.

40

Rule Section

Rule Sub-Section Trade Settlement

Rule Code 4541 i.

Rule The CBN shall transfer the amount payable in consideration of the bonds from the CBN operating account of the buyer to the CBN operating account of the seller. The charge payable to CBN for this function is N500 per transaction Where bonds transfer was unsuccessful, CSCS shall still forward settlement letters to the CBN by 2.30pm but confirming that the bonds transfer was not completed For unsuccessful trades, the CBN will not transfer the amount payable in consideration of the bonds from the CBN operating account of the buyer to the CBN operating account of the seller. In this instance, no charges are payable to CSCS and CBN. If by the End of the Day (EOD) the buyers CBN operating account is not funded to cover the amount payable in consideration of bonds purchased, the CBN will rediscount the buyers auto-mandate Treasury bills. CSCS will send a bill of charges to participants, monthly All trading members shall have 'auto rediscount mandate' which gives the CBN authority to rediscount their treasury bills for cash to cover any overdraft in a trading members CBN

Reference FMDQ

Detail GTFB Sec. 3.5

ii.

iii.

iv.

4542

i.

FMDQ

GTFB Sec. 3.5

41

Rule Section

Rule Sub-Section

Rule Code

Rule operating account at the close of business each day. Each trading member is required to re-activate its 'auto rediscount mandate' with the CBN The CBN is the custodian of all dematerialised holdings of Treasury bills in its Discount Office

Reference

Detail

ii. iii.

Dispute Resolution

Mediation

4611

Initiation FMDQ A trading member shall file a request to mediate to FMDQ. FMDQ shall contact the other trading member to confirm if they agree to mediate or arbitrate the dispute Selection FMDQ i. FMDQ shall assist in the selection of a mediator (a financial markets expert) by providing the trading members a list of mediators to choose from along with a disclosure report for each mediator ii. The trading members shall select a mediator that they all agree to work with Sessions FMDQ i. The trading members, their representatives and the mediator shall sign FMDQs Mediation Submission Agreement before the mediation

4612

4613

42

Rule Section

Rule Sub-Section

Rule Code

Rule can take place FMDQ shall schedule and communicate the mediation date and location The trading members shall discuss all the issues with the mediators guidance

Reference

Detail

ii. iii.

4614

Settlement FMDQ If the trading members agree to settle, FMDQ shall draft an enforceable agreement for both trading members to sign Impasse FMDQ If the trading members do not reach a settlement, an arbitration case can be filed, or, if one was previously filed, request can be made to continue the case Fees FMDQ Trading members shall be required to pay administrative fees for mediating through FMDQ and are responsible for the mediator's fee and attendant expenses

4615

4616

43

Rule Section

Rule Sub-Section Arbitration

Rule Code 4621

Rule

Reference FMDQ

Detail

Where the trading members do not reach a settlement, the matter may be referred for arbitration in accordance with the Arbitration and Conciliation Act LFN, 2004. Provided that the trading member shall appeal to the Commission in the event of dissatisfaction with the decision of the arbitration.

44

Definition of Terms Arbitration - refers to a formal dispute resolution process in which disputing parties allow an arbitrator, to listen to the arguments set forth by the parties, study the testimonial and/or documentary evidence, and render a decision on the matter Bond - A certificate of debt, generally long-term, under the terms of which an issuer contracts to pay the holder a fixed principal amount on a stated future date (the maturity date) and usually a series of interest payments during its life Clean Price refers to the price of the bond excluding the accrued interest. Bond prices are normally quoted clean prices Federal Government of Nigeria Securities (FGN Securities) refers to securities whose principal and/or interest is guaranteed by the Federal Government of Nigeria Inter-Dealer Broker (IDB) refers to an intermediary between dealers in securities who matches best bids with the best offers to arrive at the right price KYC Documentation - The documentation required to be produced by a trading counterparty to ensure that Know Your Client or Know Your Customer (KYC) or Anti-Money Laundering (AML) requirements are adequately fulfilled Market Maker - A dealer who is prepared to create a two-way market by quoting simultaneous bid and offer prices Mediation refers to a process in which a mediator facilitates negotiations between disputing parties, helping them to find a mutually acceptable resolution. Primary Dealer Market Maker (PDMM) System - A system whereby some institutions are given exclusive right to purchase/underwrite all Federal Government securities issued for their own holding and/or for resale Primary Market refers to the market in which new securities are issued by Governments, corporations, etc., in order to raise capital

45

Repurchase Agreement (Repo) - A fixed income transaction used for short-term financing involving the sale of an asset to another party with a simultaneous agreement to buy the asset back at a later date at a pre-agreed forward price. The counterparty selling the asset sees the transaction as a repo. The counterparty purchasing the asset sees the same trade as a reverse repo Rump Stock - Federal Government of Nigerian bonds that are not trading because their volume is not up to the standard volume to qualify for trading on two-way quote Secondary Market - This is a market for trading previously issued instruments such as stocks, bonds, options and futures Short-dated Bond - refers to any FGN bond whose Term-to-Maturity is 12 calendar months or less Trading Member refers to a Debt Management Office (DMO) licenced Primary Dealer Market Makers (PDMM) and FMDQapproved Market Maker Two-Way Quote - This is a binding market practice whereby a dealer simultaneously provides both the bid and ask quote of a security

46

Key Definitions Acronym AFS BPS CBN CSCS DH DMB DMO FGN FMDQ HTM IPHC MTM MMD MSA NMRA PDMM PTM Repo RPT RTGS SEC TDC Description Available For Sale Basis Points is equivalent to a 1/100th of a percentage The Central Bank of Nigeria Central Securities Clearing System Discount House Deposit Money Bank Debt Management Office Federal Government of Nigeria Financial Markets Dealers Quotations Held-To-Maturity Initial Pre-Hearing Conference Market-To-Market Money Market Dealer Mediation Submission Agreement Nigerian Master Repo Agreement Primary Dealer Market Maker Post-Trade Module Repurchase Agreement Riskless Principal Transaction Real Time Gross Settlement Securities and Exchange Commission Treasury Dealership Certificate

47

Reference S/N 1 2 Acronym GOBN GRRS Description A Guide To Operations For The Debt Management Office, Nigeria In The Federal Government of Nigeria Bond Market 2012 General Rules and Regulations Governing the Primary Dealer Market Maker (PDMM) System In Federal Government of Nigeria (FGN) Securities by the Debt Management Office (DM) Nigeria December 2012 Guidelines for Two Way Quote Trading in FGN Bonds by Financial Markets Dealers Association Inspection and Instruction Manual of FMDQ OTC Members Activities - November 2011 Securities and Exchange Commission Rules & Regulations - 2013

3 4 5

GTTB IIMMA SRR

48

Appendices Appendix One - Two-Way Dealing Systems Dispute Form TO: Chairman (FMDQ EXCO) Subject to the terms and conditions in our acceptance of and commitment to the Guidelines of the 2-way Quote Dealing system, we hereby notify the FMDQ EXCO of a dispute arising from a bond transaction between us and ABC and seek prompt resolution. The details of the disputed transaction are as follows: Buyer's Dealer: Seller's Dealer: Amount: Price: Yield: Transaction Date: Value Date: Coupon: Maturity Date: Bond Name: Amount due to us: Mode of Receipt: Amount Due to: Counter-party Mode of Payment:
49

Nature of the dispute: Required compensation: .. Justification for compensation: Steps already taken in resolution of the dispute: Find attached copies of the following (please tick where applicable):

1. 2. 3. 4. 5.

Contract letter Evidence of occurrence of the dispute Justification for claims Evidence of steps taken to resolve the dispute Others (specify)

Kindly advise us as we look forward to prompt resolution of the dispute

50

 Authorised Signatory

Authorised Signatory

Appendix Two Contract Letter Format for Sale of FGN Bonds

June 26, 2008

XXX Bank AAA Street Victoria Island Lagos

RE: SALE OF FGN BONDS TO XXXXXX BANK

We write to confirm the sale of FGN Bonds by AAA Banks Ltd to XXXX Bank Plc.
51

The details of the FGN Bonds are:

Security Name: Maturity date: Units: Seller: Buyer: Trade Date: Settlement Date: Coupon: Yield: Clean Price: Accrued Interest: Dirty Price: Notional: Amount Payable: Please note that the responsibilities and obligations of the parties herein are subject to applicable laws and regulations in Nigeria. Kindly indicate against two authorized signatures your acceptance of this offer. Thank you for your anticipated cooperation. Yours faithfully,
52

For: AAAAAAA BANK LIMITED __________________ Authorised Signatory For: XXXXXX BANK LIMITED __________________ Authorised Signatory __________________ Authorised Signatory __________________ Authorised Signatory

53

Appendix Three - Contract Letter Format for Purchase of FGN Bonds

June 26, 2006

XXX Bank AAA Street Victoria Island Lagos

RE: PURCHASE OF FGN BONDS TO XXXXXX BANK We write to confirm the purchase of FGN Bonds by AAA Banks Ltd from XXXX Bank Plc. The details of the FGN Bonds are:

Security Name: Maturity date: Units: Seller:

54

Buyer: Trade Date: Settlement Date: Coupon: Yield: Clean Price: Accrued Interest: Dirty Price: Notional: Amount Payable: Please note that the responsibilities and obligations of the parties herein are subject to applicable laws and regulations in Nigeria. Kindly indicate against two authorized signatures your acceptance of this offer. Thank you for your anticipated cooperation. Yours faithfully, For: AAAAAAAA LIMITED

__________________

__________________

55

Authorised Signatory

Authorised Signatory

For: XXXXXXXXX LIMITED __________________ Authorised Signatory __________________ Authorised Signatory

Appendix Four - Letter Format to CSCS Requesting Transfer of Bonds June 26, 2006 The Central Securities and Clearing Services 2-4, Customs Street First Floor, Stock Exchange House Marina Lagos

Dear Sir, Attention: (NAME & DESIGNATION) TRANSFER OF BONDS Ref: AAA/XXX/0606/00001 By the close of business today, please transfer Government Bonds as specified below:

56

BANK From: To: XXX AAA

INSTRUMENT 2nd FGN Bond 2008 Series 7 2nd FGN Bond 2008 Series 7

UNITS 1,000,000 1,000,000

FACE VALUE NGN1,000,000,000.00 NGN1,000,000,000.00

CSCS CODE/ACCOUNT NO BDAAA/123456789 BDBBB/987654321

Amount in words :

ONE BILLION NAIRA ONLY

We confirm that the consideration of NGN----------------------------------------------------------------------------is due to us by transfer through your office today, in respect of the deal below.

Deal Reference Trade Date Instrument Coupon Buyer Seller Face Value Clean Price Accrued Interest
57

Full Price Amount Payable .. Authorised Signatory Authorised Signatory

For Official Use Only CSCS Received by: Processed by: Remarks:

CBN
Received by: Processed by: Remarks:

58

Appendix Five - Letter Format to CSCS Requesting Transfer of Funds June 26, 2006

The Central Securities and Clearing Services 2-4, Customs Street First Floor, Stock Exchange House Marina Lagos Dear Sir,

Attention: (NAME & DESIGNATION)

TRANSFER OF FUNDS Ref.: SCB/GTB/0606/00001 Please by the close of business today, effect transfer of funds as follows:-

BANK Dr. Cr. AAA xxx

ACCOUNT NO. 40007101-33 40104501-45

AMOUNT N 108,400,000.00 N 108,400,000.00

CSCS CODE/ACCOUNT NO BDAAA/123456789 BDBBB/987654321

59

Amount in Words:

One Hundred And Eight Million, Four Hundred Thousand Naira Only.

The above represents payment for the purchase of bonds as detailed below

Deal Reference Trade Date Instrument Coupon Buyer Seller Face Value Clean Price Accrued Interest Full Price Amount Payable Settlement Date Authorised Signatory Authorised Signatory

For Official Use Only

60

CSCS Received by: Processed by: Remarks:

CBN Received by: Processed by: Remarks:

61

Appendix Six Acceptance and Commitment Letter DATE: The CEO, FMDQ Dear Sir, RE: TWO-WAY QUOTE BOND TRADING SYSTEM - ACCEPTANCE AND COMMITMENT LETTER We write on behalf of XYZ Member Limited in respect of the GUIDELINES FOR BOND TRADING ACTIVITIES IN THE 2 -WAY QUOTE MARKET. We have carefully studied the documents in detail and affirm that we fully understand all the issues contained therein. Accordingly, we wish to confirm our acceptance of the guidelines and willingness to participate in the bond trading market. We agree that as a committed participant, we are bound by and undertake to abide by the laid-down rules and regulations governing the operations of the market as contained in the guidelines and as may from time to time, be amended or added to (so far as such amendments/additions are pre-advised and agreed upon). We agree to accept decisions of the FMDQ EXCO and the Arbitration Committee in inter-member disputes. We agree that decisions are subject to existing arbitration laws of the Federal Government of Nigeria. We accept that CBN/DMO may apply sanctions, which will be monetary and/or recommend expulsion from the Two-Way Quote market, where necessary. We shall be liable/responsible for all actions of our Dealers listed in the FMDQ Bond Dealers Directory (FBDD) or as otherwise advised by us in writing. For and on behalf of:
62

(Name of Institution)

.... (TREASURER/HEAD OF TRADING/CHIEF DEALER)

.... (MANAGING DIRECTOR/CEO)

63

Appendix Seven Details of FGN Securities Sold on Repo Basis to other Parties Counterparty PDMMs Non PDMMs ( Banks and Discount Houses) Pension Fund Administrators Other Local Institutions Foreign Institutions Nominal Value (Nm)

Appendix Eight Details of FGN Securities Bought on Repo Basis from other Parties Counterparty PDMMs Non PDMMs ( Banks and Discount Houses) Pension Fund Administrators Other Local Institutions Foreign Institutions Nominal Value (Nm)

Appendix Nine Holdings of FGN Bonds by Foreign Investors Name Country of Origin

Nominal Value (Nm)

64

S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

LIST OF TRADING MEMBERS INSTITUTIONS ACCESS BANK PLC ASSOCIATED DISCOUNT HOUSE LTD CONSOLIDATED DISCOUNTS LTD CITIBANK NIGERIA LTD DIAMOND BANK PLC ECOBANK NIGERIA LTD ENTERPRISE BANK LTD FIRSTBANK OF NIGERIA LTD FIDELITY BANK PLC FIRST CITY MONUMENT BANK PLC FSDH MERCHANT BANK LTD GUARANTY TRUST BANK PLC STANBIC IBTC BANK PLC KAKAWA DISCOUNT HOUSE LTD KEYSTONE BANK LTD MAINSTREET BANK LTD STANDARD CHARTERED BANK NIGERIA LTD SKYE BANK PLC STERLING BANK PLC UNITED BANK FOR AFRICA PLC UNION BANK OF NIGERIA PLC UNITY BANK PLC WEMA BANK PLC ZENITH BANK PLC

65