Regulatory Alerts2014-10-24 | BSD/DIR/GEN/LAB/07/036Re:Transfer of All Non-proprietary Assets to Licensed Custodians
The Central Bank of Nigeria reminds banks and discount houses that failure to transfer non-proprietary assets to licensed custodians, as instructed in their March 11, 2014 circular, may result in severe consequences. These include losing money market dealerships, exclusion from liquidity ratio calculations, and sanctions in line with BOFIA regulations. Banks are urged to immediately comply and ensure ongoing compliance, acknowledging that late compliance will not exempt them from facing penalties for their period of non-compliance.
09-46236403 October 23, 2014 BSD/DIR/GEN/LAB/07/036 LETTER TO ALL BANKS AND DISCOUNT HOUSES RE: TRANSFER OF ALL NON-PROPRIETARY ASSETS TO LICENSED CUSTODIANS The recently concluded Risk Based Examination of banks revealed that some banks have ignored with impunity our directive on transfer of non-proprietary assets to custodians as contained in our circular BSD/DIR/GEN/LAB/07/008 dated March 11, 2014. You will recall that compliance was required no later than 30th April 2014. You will also recall that the sanctions for non-compliance within the stipulated period included possible loss of money market dealership, exclusion of 50% of the financial assets portfolio from the calculation of Liquidity Ratio, as this will be deemed non-proprietary, amongst others. In line with the CBNs stance of non-tolerance of regulatory infractions or treating regulatory directives with levity, these banks shall be sanctioned in line with the circular and the provisions of BOFIA. Banks are once again reminded to immediately comply with this circular and ensure compliance on an on-going basis. You are however to note that compliance at this time will not preclude the CBN from penalizing the period of non-compliance. Please be advised that compliance is in the best interest of your bank. Yours faithfully, 'TOKUNBO MARTINS (MRS) DIRECTOR BANKING SUPERVISION