By Olamilekan Abayomi
The Central Bank of Nigeria has revealed that by December it will assume direct control of the fixed income trading and settlement infrastructure, a move that represents one of the most significant shifts in the structure of Nigeria’s financial market in recent years. At present, the management of fixed income securities, including government bonds and treasury bills, is largely handled through platforms operated by FMDQ Group. With this planned transition, the apex bank will take over responsibility for both the settlement and the trading platform, with the aim of tightening oversight, improving transparency, and ensuring that the entire process is more closely aligned with its broader monetary policy objectives.
The CBN explained that the decision is driven by the need to have complete end-to-end visibility of all fixed income transactions and settlements in order to reduce market opacity, address regulatory gaps, and promote a more efficient financial market. It emphasized that greater oversight will help eliminate some of the fragmentation that has historically slowed down reforms and complicated its ability to regulate effectively. By taking control of both trading and settlement, the central bank hopes to ensure a more seamless integration between the country’s debt management operations and the financial system as a whole.
According to the implementation plan, the process will not be rushed but will follow a phased approach to minimize disruption. The first stage will involve user acceptance testing in October to allow market participants to familiarize themselves with the system and flag potential issues. This will be followed by a pilot phase where the new system will run alongside the existing one to build confidence and ensure that transactions are handled without technical glitches. After this parallel run, the central bank will roll out the first phase of live operations, which will see the migration of settlement activities into its own system by November 2025. The second major phase will come in December 2025, when the CBN-sponsored trading platform becomes fully operational for primary dealers, pension fund administrators, market makers, and other licensed participants in the fixed income market.
Market operators have been urged to cooperate with the CBN throughout this process, especially members of the Financial Markets Dealers Association who play a crucial role in day-to-day trading. The CBN assured stakeholders that the reforms are not designed to shut out existing operators but to reposition the market for greater efficiency and long-term growth. This transition also reflects a growing trend in which central banks around the world are moving to consolidate oversight over critical market infrastructures to prevent risks associated with third-party management and to enhance financial stability.
Analysts believe this move could significantly reshape Nigeria’s capital markets by giving the CBN more direct control over the tools it uses to implement monetary policy. However, it also raises questions about how the shift will affect competition, innovation, and the autonomy of existing trading platforms. While some observers see the reform as a step towards a stronger, more transparent market, others argue that concentrating too much control in the central bank could reduce flexibility and deter private sector-led solutions. For now, the spotlight will remain on how smoothly the transition unfolds and whether it ultimately delivers the promised improvements in market transparency and efficiency.
