Regulatory Alerts2011-03-22 | FMD\FED\CIR\GEN\01\083\11Guidelines for the Operation of the Foreign Exchange Market - Wholesale Dutch Auction System (WDAS-FWD)
The CBN's Guidelines for FX Forwards and Swaps specify the requirements for authorised dealer activities in Nigeria. The guidelines include instructions on how to correctly price and trade in FX forwards, swaps, and other financial instruments. Here is a concise summary of these guidelines: * The CBN will offer stand-FX swap facilities in 7-day, 14-day, and 21-day tenors to the Authorised Dealers. * All FX swap transactions with customers must be appropriately priced, documented, and posted in the books of the Authorised Dealers. * The Financial Markets Department (FMD) will develop daily swap fixings for 7-, 14-, and 21-day tenors which shall be widely published in newspapers. * The FX Derivatives market will be managed by the Nigeria Master Foreign Exchange Agreement (NMFA). These guidelines supersede the Guidelines for FX Derivatives and Modalities for CBN FX Forwards dated January 2011.