ONLY PRIOR REGISTERED OTC FX TRADING FROM AUGUST


From Monday August 1, 2016, only preregistered over the counter trading by corporations and between banks will be allowed in the Nigerian foreign exchange market.

According to a circular from the Central Bank of Nigeria dated July 8, the process of approval and processing of OTC trading which is called onboarding must be done as per FMDQ-Advised trading, auction and surveillance systems from August. It was issued to Authorised dealers and signed by Dr Alvan E Ikoku, Director of Financial markets department.

"In furtherance of its effort in engendering transparency and professionalism in the Nigerian foreign exchange market," the circular said "the Central Bank of Nigeria hereby directs that all FX related trades by Authorised dealers (Banks) and Corporate institutions with effect from Monday August 1, 2016 must be executed through FMDQ Advised trading, auction and surveillance systems"

"Therefore" it added "all Authorised dealers... are to execute all FX trades amongst themselves and with their clients ....through the FMDQ-advised FX systems"

Concluding it said that "The deployment of FMDQ-advised systems will only be to those corporates that have been screened and pre-approved by the FMDQ in line with its on-boarding eligibility criteria"

Such eligibility criteria try to establish formal registration requirements, necessary documents especially agreements between parties involved  and conformity with reporting requirements especially to do with settlement price, risk parameters, trade register, margin and eligible deals for clearance the next trading day/.

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