The Central Bank of Nigeria has directed participants in the foreign exchange market to submit compliance reports on adherence to the Nigeria FX Code by January 31, 2025.<\/p>\n\n\n\n
The directive is part of efforts to strengthen ethical practices, governance, and transparency in the market.<\/p>\n\n\n\n
The Nigeria FX Code, which became effective on December 2, 2024, sets out principles of good practice to ensure a robust, fair, and transparent foreign exchange market.<\/p>\n\n\n\n
It applies to authorised dealers licensed under the CBN Act of 2007, the Bank and Other Financial Institutions Act of 2020, and other entities engaged in wholesale FX business in Nigeria.<\/p>\n\n\n\n
The apex bank has mandated market participants to conduct a self-assessment and submit detailed reports on their level of compliance with the FX Code.<\/p>\n\n\n\n
These reports must be endorsed by the institution\u2019s board of directors and include an implementation plan for addressing any gaps in compliance.<\/p>\n\n\n\n
Also, extracts of board meeting minutes must be provided to demonstrate oversight and accountability.<\/p>\n\n\n\n
The FX Code document, which was released on Monday, read. \u201cMarket Participants will be required to conduct a self-assessment and submit to the CBN a report on the institution\u2019s level of compliance with the FX Code by January 31, 2025.<\/p>\n\n\n\n
\u201cAll Market Participants will thereafter be required to submit to CBN a detailed compliance implementation plan that is approved and signed by its Board along with the extracts of the Board meeting.\u201d<\/p>\n\n\n\n
Following the initial deadline of January 31, market participants will be required to file quarterly compliance reports with the Financial Markets Department of the Central Bank.<\/p>\n\n\n\n
These reports are expected to be submitted within 14 days after the end of each calendar quarter, with the first set due by March 31, 2025.<\/p>\n\n\n\n
To ensure adherence to the code, the Central Bank has outlined enforcement mechanisms, including monetary penalties as provided under the CBN Act of 2007 and the BOFIA Act of 2020.<\/p>\n\n\n\n
The measures are designed to address any non-compliance and to promote integrity in the foreign exchange market.<\/p>\n\n\n\n
The Nigeria FX Code is modelled on the Global FX Code and incorporates global best practices while addressing the specific dynamics of the Nigerian FX market.<\/p>\n\n\n\n
The code covers key areas such as ethics, governance, execution, information sharing, risk management, and settlement processes.<\/p>\n\n\n\n