{"id":3317,"date":"2024-03-08T05:20:02","date_gmt":"2024-03-08T05:20:02","guid":{"rendered":"https:\/\/slingstonelaw.com\/insight\/?p=3317"},"modified":"2024-03-08T05:20:02","modified_gmt":"2024-03-08T05:20:02","slug":"anticipating-change-an-overview-of-cbns-revised-regulatory-and-supervisory-guideline-for-bureau-de-change-operations-in-nigeria","status":"publish","type":"post","link":"https:\/\/slingstonelaw.com\/insight\/2024\/03\/08\/anticipating-change-an-overview-of-cbns-revised-regulatory-and-supervisory-guideline-for-bureau-de-change-operations-in-nigeria\/","title":{"rendered":"Anticipating Change – An Overview of CBN\u2019s Revised Regulatory and Supervisory Guideline for Bureau De Change Operations in Nigeria"},"content":{"rendered":"

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As part of the measures to address the instability of the foreign exchange market, the Central Bank of Nigeria (CBN) released an exposure draft of the Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria (the \u201cRevised Guidelines\u201d) on February 23, 2024. With the declared objective of strengthening the regulatory framework for Bureau De Change (BDC) operations, the forthcoming reform introduces comprehensive provisions which redefine licensing requirements and scope, establish corporate governance and AML\/CFT standards as well as reporting obligations amongst other key aspects. As stakeholders engage with the Revised Guidelines, it is anticipated that the final-form regulation would mark a new course \u2013 promoting integrity, transparency, and resilience in a market currently faced with numerous challenges. In this article, we highlight some important aspects of the proposed guidelines.<\/p>\n

Capitalisation Requirement:<\/strong><\/p>\n

In what is notably a strategy to ensure financial stability and soundness, the Revised Guidelines introduce a tiered structure for BDCs in Nigeria. The framework defines the operational scope of each category as follows:<\/p>\n

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  1. Tier 1 BDCs: require a minimum capital of N2 billion and are granted a national license to operate in any state within Nigeria. They may also open branches and appoint franchisees with CBN approval.<\/li>\n
  2. Tier 2 BDCs: require a minimum capital of N500 million but are restricted to operating within a single state. They are limited to a maximum of 3 branches within their chosen state.<\/li>\n<\/ol>\n

    Corporate Governance:<\/strong><\/p>\n

    The Revised Guidelines introduces increased corporate governance standards including clear requirements on multiple shareholding\/licenses, board composition and diversity as well as qualification for directors. The elements of the governance requirements include the following:<\/p>\n

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    1. Individuals and entities are now\u00a0prohibited from owning or holding shares in more than one BDC. This effectively prevents them from holding multiple licenses.<\/li>\n
    2. Board Composition:\n