The Central Bank of Nigeria has issued a warning to Authorised Dealers against reporting false foreign exchange transaction details concluded in the financial market.
The apex bank, in a circular signed by the Acting Director, Financial Markets Department, Aliyu Ashiru, and seen by THE WHISTLER threatened to sanction those that violate its “willing buyer, willing seller” directive.
In the circular dated January 29, 2024, the CBN condemned the practice of Authorised Dealers and their customers in reporting inaccurate and misleading information on transactions concluded in the financial market.
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The apex bank revealed that ongoing investigations have revealed instances of under reporting of transaction rates and the practice of ‘second cheques’ on foreign exchange and fixed income transactions.
This behaviour, the CBN added, is not compliant with the ethical standards associated with a sound financial market.
It noted furthed that deliberate attempts to create price distortions by reporting false transaction details amounts to market manipulation, which will not be tolerated and will henceforth face sanctions.
The circular with reference number Ref: FMD/DIR/PUB/CIR/001/011 reads, “All Authorised Dealers are reminded that the Central Bank of Nigeria (CBN) has permitted financial markets transactions to be conducted on a ‘willing buyer willing seller’ basis, and therefore expects prices to be quoted and displayed in a transparent manner.
“The attention of the CBN has been drawn to the practice of Authorised Dealers and their customers in reporting inaccurate and misleading information on transactions concluded in the financial market.
“Ongoing investigations have revealed instances of under reporting of transaction rates and the practice of ‘second cheques’ on foreign exchange and fixed income transactions.
“This behaviour is not compliant with the ethical standards associated with a sound financial market, and deliberate attempts to create price distortions by reporting false transaction details amounts to market manipulation which will not be tolerated and will henceforth face sanctions.
“The CBN remains committed to a transparent and well-functioning financial market and enjoins all stakeholders to carry out their legitimate business in compliance with the rules and guidelines as published by the CBN.”