“CBN Sets Deadline for Forex Companies to Prove Compliance with New FX Code”
The Central Bank of Nigeria (CBN) has issued a January 31, 2025 deadline for companies engaged in foreign currency trading to submit proof of compliance with the newly established Nigeria FX Code.
Announced on the CBN’s website on Monday, the code, which came into effect on December 2, 2024, is designed to promote fairness and transparency in Nigeria’s foreign exchange market. It applies to banks and other licensed financial institutions involved in foreign currency trading.
Under the new rules, these companies must review their practices and submit a detailed self-assessment report outlining how well they’re adhering to the FX Code. This report must be approved by the company’s board of directors, who are also required to provide minutes from their board meetings to demonstrate the seriousness of their commitment to the code.
As stated in the code: “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 January 31, 2025.”
After this initial deadline, companies will be required to submit follow-up reports every three months to the CBN’s Financial Markets Department. These quarterly reports must be submitted within two weeks of the end of each quarter, with the first one due by March 31, 2025.
Failure to comply with the rules could result in financial penalties under Nigeria’s banking regulations. The CBN emphasized that while these rules are based on international best practices, they have been specifically tailored for Nigeria’s foreign exchange market. The rules address ethical conduct, transaction procedures, information sharing, and risk management.
Through the FX Code, the CBN aims to ensure that foreign exchange market participants uphold high professional standards, maintain effective oversight, ensure fair trading practices, protect sensitive information, and implement sound risk management systems.
