New Guidelines for Bureau de Change Operators in Nigeria
The Central Bank of Nigeria (CBN) has unveiled comprehensive operational guidelines for Bureau de Change (BDC) operators, enabling them to purchase foreign currency from authorized dealer banks through the Nigerian Foreign Exchange Market (NFEM). These new regulations aim to enhance transparency, efficiency, and liquidity within the retail foreign exchange sector.
Circular to Authorized Dealers
In a circular distributed to authorized dealer banks and BDC operators, the CBN emphasized that these guidelines build upon the February 10 circular that permitted BDCs access to foreign currency from NFEM via their chosen authorized dealer banks. This framework is designed to provide regulatory guidance and operational procedures that support sustained liquidity in Nigeria’s retail foreign exchange marketplace.
Implementation of an Electronic Tracking System
As part of this framework, the CBN will implement a centralized electronic platform known as the FX BDC Purchase Tracker (FXBT). This system will enable BDCs to electronically submit purchase requests and offer real-time transaction data, thus facilitating regulatory oversight. The CBN clarified that all licensed BDCs are free to select authorized dealer banks, prohibiting banks from imposing exclusivity agreements or referral fees.
Eligibility and Compliance Requirements
Only BDCs holding valid and active licenses can participate in this new framework. Operators facing regulatory sanctions, or whose licenses have been suspended, will not be eligible until those restrictions are lifted. Prior to any foreign exchange transactions, authorized dealer banks are required to conduct Know Your Customer (KYC) and Customer Due Diligence (CDD) checks on the BDCs they engage with.
Guidelines for Payment Processing
Authorized dealer banks are mandated to evaluate purchase requests within two business hours via the electronic portal and must promptly inform BDCs of the approval or denial of their requests. Should their request be rejected, banks are responsible for providing a rationale, which may include incomplete KYC documentation or if the BDC has exceeded its $150,000 weekly purchase cap with another bank. All transactions and payments between banks and BDCs, as well as those involving customers, must occur exclusively through accounts maintained with licensed financial institutions, and third-party transactions are explicitly prohibited.
Reporting and Sanction Framework
Under the new guidelines, licensed BDCs are obligated to submit weekly electronic reports to the CBN detailing the total volume of foreign currency purchased, sales data categorized by transaction type, unused balances, and the disposition of those balances. The CBN warns that noncompliance could lead to sanctions under the Banks and Other Financial Institutions Act, 2020 (BOFIA), and the Foreign Exchange Act. Possible penalties include fines, suspension of NFEM access, revocation of BDC licenses, and criminal referrals for suspected violations.
Ongoing Compliance Monitoring
The Department of Trade and Exchange will oversee compliance through both on-site and off-site inspections, which may occur without prior notice. While existing relationships between BDCs and authorized dealer banks can continue, all future transactions must adhere to the newly established operating framework immediately.
