CBN RELEASES REVERSED REGULATORY AND SUPERVISORY GUIDELINES FOR BUREAU DE CHANGE OPERATION IN NIGERIA.

Here are key points:

1. Non-eligible promoters: Certain entities like banks, government agencies, NGOs, etc are not allowed to have ownership stake in BDCs.

2. Permissible activities: BDCs can buy and sell foreign currencies, issue prepaid cards, serve as cash points for money transfer operators, etc. They cannot take deposits, grant loans, deal in gold, or engage in capital market activities.

3. Sources of foreign currencies: BDCs can source forex from authorized dealers, travellers, hotels, embassies, etc. Large transactions above $10,000 require the declaration of the source.

4. Sale of foreign currencies: BDCs can sell forex for travel, medical bills, school fees, etc up to specified limits per customer annually. At least 75% of the sale must be via transfer, 25% can be cash. 

5. Categories of BDCs: There are 2 tiers of BDCs - Tier 1 with national presence, branches, and franchises; Tier 2 is restricted to 1 state with max 3 locations.

6. Financial requirements: Minimum capital of N2 billion for Tier 1 and N500 million for Tier 2. Other fees and deposits are specified.

7. Licensing process: Two-stage process - Approval in Principle and Final Licence, each with specified document requirements.

8. Corporate governance: Board composition, assessment of propriety, fitness requirements for directors and senior management specified. 

9. Operations: Must verify customer identity, keep transaction records, connect to CBN systems, display rates clearly, etc.

10. Supervision: Specified regulatory returns must be rendered, records available for inspection, and compliance with guidelines required.

11. Franchising standards: Standards specified for Tier 1 BDCs appointing franchises regarding policy, monitoring, branding, etc. 

13. Prudential requirements: Specified limits on open positions, fixed assets, borrowings, dividend payments, etc.

14. AML/CFT requirements: Must comply with AML/CFT regulations on policies, monitoring, reporting, etc.

15. Penalties: Non-compliance may lead to sanctions including revocation of licence.

NOTE: In summary, the guidelines aim to regulate all aspects of BDC operations from licensing, governance, sources of funds, forex transactions, reporting, supervision, etc in line with Central Bank objectives. 

Compiled by Mislaw.