CBN sets date for FX code compliance reports
According to a circular issued by the CBN, all authorized foreign exchange dealers, including banks and other financial institutions, are required to conduct a self-assessment of their compliance with the FX Code and submit a detailed report to the CBN's Financial Markets Department. The report must be endorsed by the board of directors of the respective institution.
The CBN stated that the compliance report should include information on the institution's governance structure, risk management practices, and internal controls, as well as details on how they have implemented the principles of the FX Code. The report should also highlight any challenges or difficulties encountered in implementing the code and provide recommendations for improving compliance.
After the initial deadline, authorized foreign exchange dealers will be required to submit quarterly compliance reports to the CBN, with the first report due by March 31, 2025. The CBN will review these reports to ensure that institutions are complying with the FX Code and to identify areas where additional guidance or support may be needed.
The introduction of the Nigeria FX Code is part of the CBN's efforts to strengthen ethical practices, governance, and transparency in the foreign exchange market. The code is based on international best practices and is designed to promote fair and transparent foreign exchange trading practices, reduce the risk of market abuse, and enhance confidence in the Nigerian foreign exchange market.
Institutions that fail to comply with the FX Code may face financial penalties, including fines and other sanctions. The CBN may also take other enforcement actions, such as suspending or revoking the license of an institution that fails to comply with the code.
Industry stakeholders have welcomed the introduction of the Nigeria FX Code, saying it will help to promote transparency and fairness in the foreign exchange market. "The FX Code is a positive development for the Nigerian foreign exchange market," said _Mr. Taiwo Oyedele_, a financial analyst. "It will help to reduce the risk of market abuse and promote confidence in the market."
The CBN has reaffirmed its commitment to promoting transparency and fairness in the foreign exchange market. "The introduction of the Nigeria FX Code is a key part of our efforts to strengthen governance and transparency in the foreign exchange market," said _Mr. Godwin Emefiele_, the Governor of the CBN. "We will continue to work with industry stakeholders to ensure that the code is effective in promoting fair and transparent foreign exchange trading practices in Nigeria."
The CBN will continue to monitor compliance with the FX Code and take enforcement actions against institutions that fail to comply. The bank will also provide guidance and support to institutions to help them implement the code. As the foreign exchange market continues to evolve, the CBN will review and update the FX Code as necessary to ensure that it remains effective in promoting fair and transparent foreign exchange trading practices in Nigeria.
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