Regulatory Alerts2016-08-22 | TED/FEM/FPC/GEN/01/008Re: Transactions in "Free Funds" by Authorised Dealers
The Central Bank of Nigeria has observed some Authorized Dealers engaging in transactions involving "free funds," which is against existing circulars (TED/AD/29/2004). These dealings require appropriate documentation and disclosure to regulatory authorities, and any violation of these requirements is a breach of extant regulations. The CBN reiterates that Authorized Dealers must not sell foreign exchange without the required documents or disclose them to relevant bodies. Only eligible transactions should be conducted, ensuring compliance with existing laws and regulations.
L BANK OF NIGERIA l Business District M.B. 0187, Garki, Abuja, FCT TRADE AND EXCHANGE DEPARTMENT 09 46237804 09 46237802 E-mail address:ted@cbn.gov.ng TED/FEM/FPC/GEN/01/008 August 22, 2016 TO: ALL AUTHORISED DEALERS AND GENERAL PUBLIC RE: TRANSACTIONS IN "FREE FUNDS" BY AUTHORISED DEALERS The Central Bank of Nigeria has noticed that some Authorised Dealers have continued to buy and sell foreign exchange referred to as "free funds" despite the provision of the circular referenced TED/AD/29/2004 dated March 4, 2004 on the subject.
Against the background, Authorised Dealers are to note that dealing in foreign exchange without appropriate documentation which includes relevant entries, blotters, physical documents and non-disclosure to the Regulatory Authorities is a breach of extant regulations.
The CBN therefore reiterates that, as provided in the laws and regulations governing dealings in foreign exchange, Authorised Dealers shall NOT sell foreign exchange without appropriate documentation and disclosure to the Regulatory Authorities irrespective of the source of such funds.
Accordingly, Authorised Dealers shall deal in eligible transactions only and not to engage in any foreign exchange transactions on terms inconsistent with the extant laws and/or regulations.
Please ensure compliance accordingly.
EXCHANGE DEPARTMENT