CBN to Launch FX Code, Emphasising Ethical Conduct in Nigeria’s Foreign Exchange Market
The Central Bank of Nigeria (CBN) announced the imminent launch of the Nigerian Foreign Exchange (FX) Code. This landmark development, slated for January 28th, 2025, will serve as a crucial guide for authorised dealers, promoting ethical conduct and ensuring compliance within the Nigerian Foreign Exchange Market (NFEM). This move is significantly poised to enhance the integrity and transparency of Nigeria’s foreign exchange market
“The Bank will formally launch the Code at the CBN Head Office Auditorium, Abuja, on Tuesday, January 28, 2025,” the CBN stated in a notice published on its official website. This launch signifies a pivotal moment in the CBN’s ongoing efforts to strengthen the governance and transparency of the FX market.
Recall that the CBN, in a proactive step towards bolstering market integrity, introduced revised guidelines for the NFEM in November 2024. A key pillar of these guidelines mandates that bank boards, alongside their Chief Executive Officers (CEOs) and Chief Compliance Officers, annually attest to the Nigeria FX Code of Ethics and Conduct. This crucial attestation underscores a firm commitment to upholding market integrity and ensuring strict adherence to all CBN-issued circulars and guidelines.
These revised guidelines, as emphasised by Omolara Omotunde Duke, director of the CBN’s financial markets department, supersede earlier directives, including operational changes announced in June 2023 and prior circulars dating back to 2017. The overarching objective is to deepen the foreign exchange market, building upon the successful consolidation of all official FX market windows.
Under the new framework, authorised dealers are entrusted with the critical responsibility of facilitating FX transactions for both individuals and businesses while ensuring unwavering compliance with all applicable regulations. This encompasses diligent due diligence procedures, transparent pricing mechanisms, and the provision of accessible market access through innovative digital solutions. Furthermore, the guidelines unequivocally state that all legitimate FX transactions must exclusively transpire through authorised dealers. Dealing with unlicensed intermediaries is strictly prohibited.
The revised guidelines also encompass Bureaux de Change (BDC) operators, granting licensed BDCs the authority to purchase FX from authorised dealers to fulfil customer demands, albeit within specific limits established by the CBN. Importantly, all FX transactions undertaken by BDCs, International Money Transfer Operators (IMTOs), and authorised dealers must adhere to the stringent terms of their respective licenses and the overarching principles outlined in the Nigeria FX Code.
This significant development marks a crucial juncture in the evolution of Nigeria’s foreign exchange market. By emphasising ethical conduct and promoting transparency, the CBN aims to foster a more robust and resilient FX market that serves the best interests of the Nigerian economy and its citizens.
