Regulatory Alerts2009-02-03 | TED-FEM-FPC-GEN-01-25-2009Reforms of the BDC Segment of the Foreign Exchange Market
The Nigerian Trade and Exchange Department has announced new categories for Bureau De Change (BDC) licensing requirements. Class 'A' BDCs are allowed to perform a wider range of transactions, including foreign exchange purchases/sales, prepaid cards, travellers' cheques, money transfers, and participation in CBN foreign exchange cash auctions. They must meet strict criteria such as having a minimum paid-up capital of N500 million verifiable at all times, maintaining a non-interesting US$200,000 deposit with the Central Bank of Nigeria (CBN), paying a non-refundable application fee of N100,000 and licensing fees, as well as meeting daily reporting requirements. Class 'B' BDCs are limited to performing specific transactions like Business Travel Allowance, Personal Travel Allowance, buying foreign exchange from autonomous sources, and selling it to end-users up to a limit of USD 5,000 per transaction. They must also meet certain conditions but have fewer requirements than Class 'A'. All Authorised Dealers and BDCs are expected to comply with these new regulations or face appropriate sanctions.