Nigeria: Issuance and treatment of Bankers Acceptances and Commercial Papers
The Central Bank of Nigeria (CBN) has introduced Guidelines on the Issuance and Treatment of Bankers Acceptances (BAs) and Commercial Papers (CPs), aimed at deepening and facilitating the effective and efficient functioning of the Nigerian money market.
The introduction of the guidelines, according to the regulator, will ensure uniform practice and correct treatment of BAs and CPs by banks and discount houses (financial institutions) in Nigeria.
The guidelines cover key areas including:
- general conditions for creating BAs and CPs;
- procedures for issuance of BAs and CPs;
- rating requirements for CP issues/issuers; and
- roles and responsibilities of parties to CP issuance.
Other areas the guidelines address include:
- registration of CPs;
- reporting requirements for BAs and CPs;
- disclosure requirements; and
- limits and amounts of issue of BAs and CPs.
According to the CBN, non-compliance with the guidelines attracts penalties prescribed in the Banks and Other Financial Institutions Act 1991 (as amended) and may also include a financial institution being debarred from the BA or CP market.