The Central Bank of Nigeria has published the Nigerian Foreign Exchange Code, a set of good-practice principles intended to strengthen conduct, integrity, and the effective functioning of Nigeria’s wholesale foreign exchange market. The code applies to “Market Participants”, including Authorised Dealers licensed by the Central Bank of Nigeria and other entities engaged in wholesale foreign exchange business, and is effective from 02 December 2024. The framework is organised around six leading principles covering ethics, governance, execution, information sharing, risk management and compliance, and confirmation and settlement processes. Detailed expectations include managing conflicts of interest, handling client orders and markups fairly, protecting confidential information and sharing market colour only in aggregated and anonymised form, maintaining controls to detect abusive or manipulative practices, applying KYC and anti-money laundering safeguards, and strengthening post-trade arrangements, including confirming trades within 10 minutes and controlling novations, amendments, and cancellations after clearance from the Central Bank of Nigeria. Market Participants must submit a self-assessment report on their level of compliance by 31 January 2025 and then provide a board-approved compliance implementation plan alongside extracts of the relevant board meeting. Ongoing reporting requires quarterly compliance reports to the Financial Markets Department within 14 days of each calendar quarter-end, with the first report due by 31 March 2025, and non-compliance may trigger enforcement and administrative actions, including monetary penalties under the Central Bank of Nigeria Act 2007 and the Banks and Other Financial Institutions Act 2020.
Central Bank of Nigeria 2025-01-27
Central Bank of Nigeria issues Nigerian Foreign Exchange Code with self-assessment by 31 January 2025 and quarterly compliance reporting
The Central Bank of Nigeria issued the Nigerian Foreign Exchange Code to enhance conduct and integrity in the wholesale foreign exchange market, effective 02 December 2024. It outlines principles on ethics, governance, execution, and compliance, requiring Market Participants to manage conflicts of interest, protect confidential information, and maintain anti-money laundering safeguards. Participants must submit compliance reports quarterly, with non-compliance potentially leading to enforcement actions and penalties.