The Lagos Commodities and Futures Exchange (LCFE) has announced a strategic partnership with FMDQ Clear Limited to enhance the clearing, settlement, and risk management infrastructure for the petroleum liquids market in Nigeria.
This collaboration was formalized through the signing of a Memorandum of Understanding (MoU), which sets the stage for FMDQ Clear to provide essential third-party clearing and related services for transactions conducted on LCFE’s electronic trading platform.
As part of the arrangement, FMDQ Clear will act as the Central Counterparty (CCP) responsible for handling the clearing and settlement of petroleum liquids transactions, following the guidelines outlined in the MoU and subsequent agreements between the institutions.
The partnership aims to fortify the post-trade architecture of Nigeria’s commodities market by offering access to well-established clearing technology, robust risk-management systems, collateral management, and comprehensive operational infrastructure.
LCFE’s Managing Director, Akin Akeredolu-Ale, emphasized that this MoU supports the Exchange’s mission to broaden strategic affiliations in risk management and enhance the necessary infrastructure for organized commodities trading. He noted that this collaboration enables LCFE to utilize FMDQ Clear’s existing capabilities, thus avoiding the extensive time, capital investment, and resources required to build a Central Counterparty system from scratch.
Akeredolu-Ale highlighted that adopting an established institutional platform will significantly streamline the establishment of a solid post-trade clearing framework for the Exchange.
