The Bank of Ghana (BoG) has fined Fidelity Bank Ghana and First National Bank Ghana and subsequently suspended their Forex Licenses.
In a statement issued by the Central Bank, the BoG explained that the above mentioned banks breached the Ghana Interbank Forex Market Conduct rules.
“The two commercial banks Fidelity and First National Bank have also been fined a combined 1,000 penalty points for breaching sections 3. 4, 3.5 and 3.9 of the Ghana Interbank Forex Market Conduct rules.”
The Central Bank pinpointed that Licenses of Fidelity Bank Ghana and First National Bank Ghana are suspended effective today June 29, 2023 to July 28, 2023.
The BoG further cautioned forex markets players which included banks, forex bureaus, forex brokers and money transfers operators (MTO) to strictly adhere to the applicable forex market regulations and guidelines.
According to BoG, all market participants are required to conduct their activities ethically, transparently and professionally to ensure fairness and integrity of the foreign exchange market.
It added that market participants are expected to act in an honest and fair manner when dealing with clients and other participants. Market players are also required to act with integrity in all their dealings or activities.
Rules By BoG to LFXD
Spelling out the rules, BoG said a bank can only become a LFXD and a member of the interbank FX market if granted a license by Bank of Ghana under Section 3 of the Foreign Exchange Act, 2006 (Act 723).
Meanwhile, all LFXDs are required to make market by showing a binding two-way quote for all currencies traded in the interbank market if requested by another LFXD. If the amount is not specified, the LFXD shall use the minimum traded lot of 250,000 US dollars or as agreed from time to time by the industry in consultation with the Bank of Ghana.
The LFXD is obliged to trade for that amount at the specified quoted price. A LFXD with a different amount in mind shall specify it, but need not state whether the intention is to buy or sell. A LFXD is not obliged to present a quote for any other amount other than the minimum traded lots agreed by the industry.
LFXDs are required to update indicative quotes for buying and selling US dollars at regular intervals, on the Reuters and Bloomberg information systems. Indicative quotes shall be updated at intervals of no more than 30 minutes. (This will show the price at which a market-maker is prepared to buy and sell at the minimum traded lots).
The BoG asserted that all interbank FX trades must be booked on the Reuters platform and appropriately confirmed within five (5) minutes after the trade is concluded. These trades must also be reported in the daily FX report submitted to the Bank of Ghana.
LFXDs are prohibited from participating in any form of FX auction initiated by any exporter or foreign exchange earner in Ghana.
Moreover, LFXDs shall submit to the Bank of Ghana two types of statements, daily and monthly, on foreign exchange transactions in the interbank market and their foreign exchange balances, in the format prescribed by the Bank of Ghana.
Data for each business day shall be received by the time specified by the Bank of Ghana and the monthly return no later than 15:30 hours GMT on the seventh business day of the following month.
LFXDs are also obliged to provide the Bank of Ghana, by telephone, with other information about transactions and other factors likely to have a substantial effect on the market. Meanwhile, Market-makers are obliged to give high priority to such communications.
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