LCFE, FMDQ Partner to Strengthen Petroleum Liquids Market Infrastructure

The Lagos Commodities and Futures Exchange (LCFE) and FMDQ Clear Limited have entered into a strategic partnership to strengthen the clearing, settlement and risk-management infrastructure for petroleum liquids transactions in Nigeria’s emerging commodities market. The two institutions signed a Memorandum of Understanding (MoU), establishing a framework for FMDQ Clear to provide third-party clearing infrastructure and related services for petroleum liquids transactions executed on LCFE’s electronic trading platform. Under the proposed arrangement, FMDQ Clear will serve as the Central Counterparty (CCP) responsible for clearing and settlement of petroleum liquids transactions, subject to the terms of the MoU and subsequent definitive agreements between the parties. The partnership is expected to strengthen the post-trade architecture of the commodities market by providing access to established clearing technology, risk-management systems, collateral management and operational infrastructure. Speaking on the development, LCFE Managing Director, Akin Akeredolu-Ale, said the MoU aligns with the Exchange’s commitment to expanding strategic partnerships in risk management and strengthening the infrastructure required to support organised commodities trading. He explained that the collaboration would enable LCFE to leverage FMDQ Clear’s existing clearing technology, risk-management systems and operational capabilities rather than independently developing a Central Counterparty infrastructure from the ground up. According to him, this approach is expected to significantly reduce the time, capital investment and technical resources required to establish a robust post-trade clearing framework, while allowing the Exchange to benefit from an established institutional platform.