The Central Bank of Nigeria (CBN) is intensifying efforts to enforce ethical standards in the foreign exchange market, setting January 31, 2025, as the deadline for market participants to submit compliance reports on the newly introduced Nigeria FX 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.
“All 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.”
Introduced on December 2, 2024, the Nigeria FX Code is designed to promote transparency, fairness, and governance in the country’s foreign exchange market. Modeled on the Global FX Code but tailored to Nigeria’s unique market dynamics, the code outlines best practices in ethics, governance, execution, information sharing, risk management, and settlement.
The compliance directive applies to authorized dealers licensed under the CBN Act of 2007 and the Bank and Other Financial Institutions Act (BOFIA) of 2020, as well as entities engaged in wholesale FX transactions. Market participants are required to conduct a self-assessment of their adherence to the code and submit a detailed report endorsed by their board of directors.
The CBN has also mandated the submission of an implementation plan to address any compliance gaps, alongside extracts from board meeting minutes to demonstrate oversight and accountability.
Beyond the initial deadline, the CBN has introduced a structured reporting framework. Market participants will submit quarterly compliance reports to the Financial Markets Department within 14 days of each quarter’s end, starting with the first submission due on March 31, 2025.
To ensure adherence, the apex bank has outlined strict enforcement measures, including monetary penalties under the CBN Act and BOFIA. These measures are aimed at fostering trust and professionalism in the foreign exchange market.
