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.
09 462 37 811 09-462-37-809 TRADE & EXCHANGE DEPARTMENT Tol:.
E-mail: ted@conbank.org Fax:....
TED/FEM/FPC/GEN/01/026 ・ ・・・ February 26, 2009 TO: ALL AUTHORISED DEALERS, BUREAUX DE CHANGE OPERATORS AND THE GENERAL PUBLIC
Reforms Exchange Market
OF THE BDC SEGMENT OF THE FOREIGN This is to inform all Authorized Dealers, Bureaux De Change (BDC) cperators and the general public that the licensing requirements of BDCs have been reviewed. Henceforth, BDCs have been restructured into two categories.
l . Class 'A' BDCs (are allowed to carry out the following transactions: Sale and purchase of Forex i) Prepaid cards ii) Travellers' cheques iii) iv) Authority to import foreign exchange (subject to compliance with Anti Money Laundering (AML) requirements) Money transfer - inward and outward (subject to compliance v) with AML requirements) Participation in the CBN foreign exchange cash auction vi) (CBN can only sell cash foreign exchange to this category of BDCs).
Requirements:
l ) Minimum paid-up capital of N500 million verifiable at all times.
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Mandatory Deposit with the CBN of US$200,000.00 - non-interest bearing.
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Non-refundable application fee of N100,000.00. 4) Licensing fee of N1.00 million.
Renewal (subject to satisfactory reporting 5) Annual requirements and performance) fee of N250,000.00.
- Minimum IT infrastructure that enables the BDC to make daily returns to CBN.
- Class 'B' BDCs (are to operate under the existing guidelines and to carry out the following transactions): a) Business Travel Allowance (BTA) b) Personal Travel Allowance (FTA) c) Buy foreign exchange from autonomous sources only d) Sale of foreign exchange to end-users subject to a maximum limit of USD5,000.00 per transaction REQUIREMENTS: a) Minimum paid-up capital b) Non-refundable application fee c) Non refundable licence fee
d) Non-refundable annual licensing renewal fee e) Non-refundable change of name fee ' f) Mandatory caution deposit -
| N10,000,000.00 |
|---|
| N10,000.00 |
| N100,000.00 |
| N10,000.00 |
| N10,000.00 |
| N1,000,000.00 |
For the avoidance of doubt Class "I3" BDCs are not allowed under any circumstance to carry out the transactions meant for Class "A" BDCs.
All Authorised Dealers and BDCs are enjoined to ensure compliance with the provisions of this circular as any infraction shall be appropriately sanctioned.
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for: AG. DIRECTOR, TRADE AND EXCHANGE DEPARTMENT