February Regulatory Roundup: What happened this month in Regulations?

The past month has been a banquet of regulatory updates, with each dish carefully crafted by regulatory authorities like the Central Bank of Nigeria (CBN), the National Data Protection Commission (NDPC), the Securities and Exchange Commission (SEC), and many more. From savoury policies to delectable guidelines, let us delve into the feast of regulatory developments that have shaped the landscape of governance and compliance.

Nigeria

1. Harmonisation of reporting requirements for foreign currency exposures of banks
2. CBN revises guidelines for International Money Transfer Operators (IMTOs)
3. CBN releases draft guidelines for Bureau de Change (BDCs)
4. CBN limits cash payments for personal travel allowance (PTA)
5. NDPC announces mandatory registration of all data processors and controllers before the end of June 2024.?
6. Monetary policy committee implements interest rate hike to tackle inflation

Africa

1. South Africa financial regulators plan to leave the FATF Grey List in 2025
2. Kenya introduces the Virtual Assets Bill?
3. Mamamoni secures funding to expand its ventures across Africa.?
4. South African company, Stitch introduces WigWag to streamline payments.

Global News

1. Japan Government approves VC Bill
2. Spotify Founder Launches a health startup called Neko Health
3. Google and Microsoft both announce integrations of AI into search engines

Crypto Scoop

1. Binance under increased scrutiny in Nigeria?
2. United Kingdom to introduce new regulations on cryptocurrency.

Mergers and Acquisitions

Carbon acquires Vella Finance to launch new banking platform

News in Nigeria

With Yemi Cardoso as the head of the apex bank, new regulations have been introduced since the start of the year, and it seems like other regulators have taken a cue from the CBN. Without further ado, let us delve into all the regulations the regulators released this month.?

CBN implements measures to manage foreign currency exposures of banks.

The Central Bank of Nigeria (the “CBN”) on 31 January 2024 issued a circular titled the “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks” (the “Circular”), which it stated is aimed at managing risks and preventing potential losses that could pose significant challenges to the Nigerian financial system. The Circular comes as the CBN expressed its concerns over the escalating foreign currency exposures of banks, particularly through their Net Open Position (NOP) and their involvement in foreign currency speculations that involve purchasing or holding foreign currencies with the expectation of profiting from exchange rate fluctuations.

CBN Revises Guidelines for International Money Transfer Operators (IMTOs)

The IMTO Guidelines, initially issued in September 2014 ("Old IMTO Guidelines"), govern the licensing and operations of IMTOs in Nigeria. Recently released Guidelines for IMTOs ("New IMTO Guidelines") revise the old ones and specify permissible activities, new organisational structures, and corporate governance standards for IMTOs.

Furthermore, as per the CBN's Circular of September 13, 2023, IMTOs were mandated to provide an exchange rate for naira payouts to diaspora remittance beneficiaries within a permissible range of -2.5% to +2.5% of the previous day's closing rate of the Nigerian foreign exchange market. The CBN has now directed, through the Allowable Limit Circular, that IMTOs can issue remittance at prevailing foreign exchange market rates.

What is dead may never die: CBN’s New Plan for Bureau de Change (BDC) after Initial Moratorium on licensing

One of the significant changes of the last CBN administration was the moratorium placed on BDC licensing and operations. The refusal of the CBN to renew BDC licences implied that the BDC licence was phased out by implication. This position may be changing soon with the exposure draft of the new BDC guidelines issued by this administration. There is a lot of information to digest, however salient provisions include restructured? share capital, restricted ownership to a single person, and the digital integration of reporting and AML compliance..?

CBN Bans Cash Payments for Travel Allowance

In a bid to stabilise the Naira, the CBN issued a directive banning banks from making PTA and BTA payments? in cash, providing an alternative of only electronic payments of the travel allowance. While this may inconvenience some? businesses, the rationale behind this regulation is to reduce the pressure on the exchange rate. We are keeping our fingers crossed!

Monetary Policy Committee Implements Interest Rate Hike to Tackle Inflation

The Monetary Policy Committee (MPC), responsible for assessing economic and financial conditions, has raised the interest rate to 22.75% to address inflation and foster economic stability. This adjustment will reverberate across various sectors, affecting borrowers, lenders, banks, investors, and more, with significant implications for the overall economy.

Never Say Never: Nigeria Data Protection Commission begins implementation of registration requirement under the Nigerian Data Protection Act

The NDPC has recently announced that all data controllers and processors must be mandatorily registered with the Commission. The announcement introduces the different categories of registration for the data controllers and processors. All existing data processors and controllers must register between 30th January 2024 and 30th June 2024.

News Across Africa

A Need for Increased Compliance: South Africa intends to leave the Grey List sooner than anticipated.

The Financial Sector Conduct Authority (South Africa) intends to leave the grey list of the Financial Action Task Force (FATF) it was placed in 2023. The FSCA intends to bulk up its regulations, increase its monitoring and supervisory capacites on anti-money laundering compliance to ensure it exits the grey list in 2025.

Kenya Introduces the Virtual Assets Service Providers Bill

Kenya is developing new rules for cryptocurrency trading to tackle issues like money laundering and terrorism financing. A special team is creating a detailed set of laws to regulate digital assets. They aim to present the proposal to the Cabinet for approval. Kenya wants to improve its financial system and follow global rules, especially to avoid being on FATF's watchlist. This bill aims to establish a regulatory framework for entities offering virtual asset services, contributing to the overall efforts to enhance transparency and security within the cryptocurrency sector in Kenya.

Mamamoni Secures Funding to Expand its Ventures across Africa

Mamamoni Limited, a female-focused fintech social enterprise, has received €250,000 in funding from the Challenge Fund for Youth Employment (CFYE) to grow its network of female financial agents throughout Nigeria. This funding, provided by the Netherlands Ministry of Foreign Affairs over two years, will support Mamamoni's goal of empowering low-income women with vital financial resources and knowledge. As part of this initiative, the company also intends to introduce “Herpay” which is a payment app solely focused on women.

South African company, Stitch introduces WigWag to streamline payments.?

WigWag, part of the South African payment service provider Stitch, has introduced an AI-powered bot for handling payments through WhatsApp. Designed for small and medium-sized businesses, the tool aims to simplify payment management without the need to switch between different apps and browsers.

Mergers and Acquisitions

Carbon Acquires Vella Finance to Launch New Banking Platform

After being acquired by Carbon, the fintech's solutions will now be integrated into the new Carbon Business banking platform. Vella Finance, now part of Carbon, will shift its business clients to Carbon Business and provide individual customers with the choice to switch to business accounts. The platform allows businesses to get loans, set up sub-accounts for financial organisations, and automatically divide income streams into these accounts.?

Carbon has also integrated Vella Finance's AI technology into its new business platform to analyse transactions, providing comprehensive insights for smarter decision-making and growth strategies.

News Across the World

Japan Government approves Venture Capital Bill

The government of Japan approved a bill that allows venture capital firms and investment funds to hold crypto assets and if this bill is eventually made into law, it could boost investment in web3 startups.?

Spotify Founder Launches a health startup called Neko Health

Neko Health is set to revolutionise healthcare in Europe with its innovative full-body scanning technology, aimed at early disease detection and prevention. After four years of extensive research and development, Neko Health is poised to address the challenges faced by Europe's healthcare systems. Hjalmar Nilsonne, Ek's co-founder and CEO of Neko Health, envisions a future where early detection and prevention of serious illnesses lead to reduced human suffering and social costs. With cutting-edge technology and AI, Neko Health aims to usher in a new era of healthcare advancement.

Google and Microsoft Both Announce Integrations of AI into Search Engines

Both Google and Microsoft have announced the various integration of Bard for Google and the addition of AI to BIng and Edge for Microsoft. Though the products are not fully developed yet, beta versions have been released to several testers which may see results pouring in.?

Crypto Scoop

Binance Under Increased Scrutiny in Nigeria?

The Nigerian government allegedly arrested two senior executives of Binance on their arrival to the country for allegations ranging from manipulation of the foreign exchange market, concerns of suspicious flow into the market which implies money laundering. The CBN Governor, Yemi Cardoso in a conference alluded to the fact that over $26 Billion in funds have passed through Binance. This comes shortly after the CBN released a circular in December 2023 guiding the licensing of virtual assets service providers.

The United Kingdom Introduces New Regulations Guiding Cryptocurrency

On the international front, the United Kingdom is preparing to implement regulatory measures concerning stablecoins and crypto-staking services within the coming six months. This initiative comes as a response to increasing pressures and demands within the cryptocurrency industry. Bim Afolami, the Economic Secretary to the Treasury, emphasised the government's dedication to streamlining the legislative process during an industry event held in London. This commitment underscores the UK's proactive approach to address emerging trends and challenges in the rapidly evolving digital asset landscape.

Moving Forward

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