THE Central Bank of Nigeria (CBN) has asked participants in the foreign exchange market to submit compliance reports to the Nigeria FX Code on or by January 31.

The directive is contained in the FX Code document it released on Monday, January, 27.

It stated, “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.”

The apex bank had on Wednesday, January 22 approved the release of the FX code to promote market participation and ethical conduct in the Nigerian FX market, The ICIR reported.

The code is also intended to offer clearer directives on the expectations for market participants and ensure that the market operates fairly and transparently.

It is to be formally launched at the CBN Head Office Auditorium in Abuja on Tuesday, January 28.

In the document released on Monday, CBN reiterated that its directive is part of efforts to strengthen ethical practices, governance, and transparency in the market.

The FX Code, which became effective on December 2, 2024, sets out principles of good practice to ensure a robust, fair, and transparent foreign exchange market.

It applies to authorised dealers licensed under the CBN Act of 2007, the Bank and Other Financial Institutions Act of 2020, and other entities engaged in wholesale FX business in Nigeria, the apex bank stated.

It further mandated market participants to conduct a self-assessment and submit detailed reports on their level of compliance with the FX Code.

It said the reports must be endorsed by their bank’s board of directors and include an implementation plan for addressing any gaps in compliance.

Part of the directives also is that market participants will be required to file quarterly compliance reports with the Financial Markets Department of the apex bank.

The reports are to be submitted within 14 days after the end of each calendar quarter, starting from March this year.

To ensure adherence to the code, CBN outlined enforcement mechanisms, including monetary penalties as provided under the CBN Act of 2007 and the BOFIA Act of 2020.

The measures are designed to address any non-compliance and to promote integrity in the foreign exchange market.

The code is modelled on the Global FX Code and incorporates global best practices while addressing the specific dynamics of the Nigerian FX market.

It covers key areas such as ethics, governance, execution, information sharing, risk management, and settlement processes.

It expects market participants to maintain high ethical standards, establish sound governance structures, handle transactions fairly, protect confidential information, and implement robust risk management frameworks.