News & Events

FEB 2024 NEWS CHIDIEBERE NWODIKA, KOFO DOSEKUN AND FUNMILAYO OTSEMOBOR

INTRODUCTION

This is an update on the circulars and regulations released by the Central Bank of Nigeria (the “CBN”) in January 2024. We have also provided a report of relevant market, legislative, and case law updates that are relevant to the financial services sector that occurred during the month of January 2024.

 SYNOPSIS

 CBN REGULATORY UPDATES

  1. CBN ISSUES CIRCULAR ON APPROVED COMMUNICATION CHANNELS FOR TRANSACTION WITH FINANCIAL MARKETS DEPARTMENT

The CBN on December 29, 2023, issued a circular to all authorised dealers on the approved communication channels for transactions with the financial department of the CBN.

  1. CBN ISSUES CIRCULAR ON AUTHORIZED FINANCIAL MARKETS SIGNATORIES AND DEALING MANDATES

 The CBN on December 29, 2023, issued a circular on authorized financial markets signatories and dealing mandates.

  1. fiveCBN DISSOLVES THE BOARD AND MANAGEMENT OF UNION BANK, KEYSTONE BANK AND POLARIS BANK

On January 10, 2024, the CBN made a significant announcement regarding the dissolution of the management boards of Union Bank Plc, Keystone Bank Limited, and Polaris Bank Limited. 

  1. CBN TO CONVENE FIRST 2024 MONETARY POLICY COMMITTEE MEETING IN FEBRUARY

 The CBN has set its 2024 Monetary Policy Committee (MPC) meeting for February 26 and 27, 2024, as outlined in a tentative MPC meeting calendar for 2024. The schedule indicates a total of six MPC meetings planned for the year, with the first one scheduled for February, 2024.

  1. CBN ISSUES CIRCULAR AUTHORISED DEALERS ON FINANCIAL MARKETS PRICE TRANSPARENCY 

On January 29, 2024, the CBN reminded all authorised dealers that it has permitted financial markets transactions to be conducted on a ‘willing buyer willing seller’ basis, and therefore, transactions in the financial markets are to be conducted transparently.

  1. CBN ISSUES CIRCULAR ON HARMONISATION OF REPORTING REQUIREMENTS ON FOREIGN CURRENCY EXPOSURES OF BANKS 

On January 31, 2024, the CBN issued a circular titled the “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks” aimed at managing risks and preventing potential losses that could potentially pose challenges to the Nigerian financial system.

  1. CBN ISSUES CIRCULAR ON REMOVAL OF ALLOWABLE LIMIT OF EXCHANGE RATE QUOTED BY INTERNATIONAL MONEY TRANSFER OPERATORS 

On January 31, 2024, the CBN issued a circular directed to all authorised dealers, International Money Transfer operators (IMTOs) and the general public where it removed the previous cap on exchange rates quoted by IMTOs. The CBN had previously on September 13, 2023, via a circular referenced TED/FEM/PUB/FPC/001/009 directed IMTOs to quote rates within an allowable limit of -2.5% to +2.5% around the previous day’s closing rate of the Nigerian Foreign Exchange Market.

  1. CBN ISSUES NEW GUIDELINES FOR INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA 

On January 31, 2024, the CBN issued revised guidelines for International Money Transfer Services in Nigeria which effectively repeals the guidelines on International Money Transfer Services issued by the CBN in June, 2014. 

MARKET UPDATES 

  1. CBN AND BANKS, TO LAUNCH STABLECOIN PEGGED TO UNSTABLE NAIRA

Based on media reports, the Federal Government of Nigeria has announced the upcoming launch of the cNGN stablecoin on February 27, 2024, by Nigerian banks and fintech companies.

  1. FIRST BANK OF NIGERIA HOLDINGS PLC APPOINTS MR. FEMI OTEDOLA AS CHAIRMAN OF ITS BOARD OF DIRECTORS 

Based on media reports, First Bank of Nigeria Holdings appoints Mr. Femi Otedola as the chairman of its board of directors. Mr. Femi Otedola succeeds the outgoing Chairman of the board, Alhaji Ahmad Abdullahi.

  1. FMDQ REVISES FOREIGN EXCHANGE MARKET RATES PRICING METHODOLOGIES

FMDQ released a market notice to notify all market participants of amendments to the methodologies applied for the computation of the Nigerian Autonomous Foreign Exchange Fixing, and the Nigerian Autonomous Foreign Exchange Market Spot Closing Rate. 

NGX UPDATES

  1. NGX UNVEILS THE NGX PENSION BROAD INDEX AS THE NEW BENCHMARK FOR NIGERIAN PENSION EQUITY PORTFOLIOS

The Nigerian Exchange Limited (NGX), in conjunction with the National Pension Commission (PenCom), unveiled the NGX Pension Broad Index (NGXPENBRD) on June 15, 2023, marking a significant development in providing a comprehensive benchmark for equities investment within the pension industry.

  1. LEADERSHIP TRANSITION AT NIGERIAN EXCHANGE GROUP PLC: MR. TEMI POPOOLA APPOINTED GMD/CEO DESIGNATE

The NGX Group has officially announced key appointments in its leadership, marking a transition for the organization. The NGX Group has introduced Mr. Temi Popoola as the GMD/CEO designate, effective January 1, 2024, pending formal approval from the Securities and Exchange Commission.

SEC UPDATE

  1. NASD PLC RECEIVES SEC APPROVAL FOR LAUNCH OF DIGITAL SECURITIES PLATFORM (N-DSP) IN NIGERIA

Based on media reports, the SEC has given its approval to NASD Plc to launch its Digital Securities Platform (N-DSP) under the Regulatory Incubation (RI) Programme, powered by Blockstation.

LEGISLATIVE UPDATE 

  1. SENATE APPROVES SECURITIZATION OF N3 TRILLION ‘WAYS AND MEANS’ OUTSTANDING DEBT   

Based on media reports, the Nigerian Senate has given its approval for the securitization of the outstanding N7.3 trillion in ways and means, following a request from President Bola Tinubu. The President, in a letter to the Nigerian Senate, urged a prompt endorsement for the securitization of the existing debit balance of N7.3 trillion in the consolidated revenue fund. 

CASE LAW UPDATE

  1. FEDERAL HIGH COURT ORDERS CBN TO COMPLY WITH FREEDOM OF INFORMATION ORDER

Based on media reports, Justice J.K. Omotosho of the Federal High Court in Abuja in a significant legal development has issued a landmark judgment directing the CBN to comply with the Freedom of Information request filed by the Human and Environmental Development Agenda (HEDA Resource Centre). In his ruling, Justice Omotosho ordered the CBN to provide the information outlined in the applicant’s request dated August 20, 2021. The request seeks specific details related to the resolution between CBN and MTN Nigeria Limited concerning charges of improper fund repatriation.

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