The Central Bank of Nigeria has issued a directive to Deposit Money Banks and all other participants in the foreign exchange market in the country to submit compliance reports regarding the FX Code by December 31, 2024.
The FX Code introduces new governance structures and operational frameworks for institutions involved in FX activities, such as banks and financial institutions.
The directive comes as part of CBN’s efforts to strengthen the integrity and efficiency of Nigeria’s foreign exchange market, ensuring it aligns with global standards.
Read Also: CBN Introduces Electronic Matching System To Eliminate Speculation In Forex Market
The FX Code, issued by CBN and effective from October 14, 2024, outlines a comprehensive set of principles that regulate market participants’ conduct to ensure ethical and professional behaviour in Nigeria’s FX market.
The FX Code document reads: “The FX Code is issued pursuant to CBN Act 2007 and BOFIA Act 2020 which empowers the Central Bank of Nigeria to issue directions for the standards to be adhered to by an institution in the conduct of foreign exchange business in Nigeria.
“Market participants will be required to conduct a self-assessment and submit to the CBN a report on the institution’s level of compliance with the FX Code by December 31, 2024.
Read Also: CBN Partners Microfinance Banks to Promote Financial Inclusion
“All market participants will thereafter be required to submit to the CBN a detailed compliance implementation plan that is approved by its board by December 31, 2024. The FX Code should be fully implemented, and each market participant be in full compliance by December 31, 2024.”
The apex bank clarified who the market participants are, noting, “the FX Code applies to market participants. These are banks licensed by the Central Bank of Nigeria under the CBN Act 2007 and Bank and Other Financial Institutions Act 2020 and engage in the wholesale foreign exchange business in Nigeria as part of their licensed business.”
Read Also: CBN Boosts Liquidity In FX Market, Approves Sale Of $20k To BDCs At N1,590/$1
The apex bank added that failure to comply with this requirement could attract sanctions, including monetary penalties, under the CBN Act of 2007 and the Bank and Other Financial Institutions Act of 2020.
These participants are required to have a sound governance framework, uphold ethical standards, and manage risks effectively.
“Market participants should strive for the highest professional standards,” the CBN emphasised.
