Welcome to the November regulatory round up. We provide you with the latest regulatory news and insights across Nigeria, Africa and beyond. Let’s dive into a thoughtful and comprehensive update on recent developments.
Regulatory Update in Nigeria
- Momo PSB is Set to Rival Opay and Paystack in the Market.
- Commercial, Merchants and Non-Interest banks (CMNIBs) to Accept and Trade ITFCs Under New CBN Guidelines.
- CBN Reports Increased Demand for Long-Term Securities Amid Rising Inflation.
- Opay has Launched the Large Transaction Shield to Protect Users from Financial Fraud.
- CBN Launches Initiatives to Drive Financial Inclusion.
- Moniepoint Set to Disrupt Nigeria’s Financial Industry with Commercial Bank License.
- CBN to Crack Down on DMB’s for Cash Hoarding.
- Concerns Emerge Over Proposed Investment and Securities Bill of 2024.
- Nigerian Communications Commission to Introduce Maximum Tariff Plan Limit for Telecom Operators.
- Country-Wide Application of the National Lottery Act 2005 Declared Unconstitutional by the Supreme Court.
- CBN Increases Interest Rates to 27.50%.
Across Africa
- Mastercard has Entered into a 10-year partnership with Diamond Trust Bank.
- Ethiopia National Bank Mandates Adoption of QR Code Payment Standards for PSPS.
- Kenya’s Central Bank to Review Interest Rate in December.
- BNPLs to be Regulated by Kenya’s Central Bank in New Bill.
- Kenya Introduces New Tax Bill.
- Stronger IT Risk Management Requirements for South African FI’s as New Regulation Takes Effect.
- Zimbabwe Introduces Data Controller Licensing Requirement for Whatsapp Group Administrators.
- A WhatsApp-Powered Bank Rolls-out in South Africa.
- Egypt Plans to introduce Card tokenisation in 2025 to Enhance the Security of Digital Payments.
Across the World
- TikTok Canada to Shutdown Over National Security Concerns.
- UK Unveils Corporate Strict Liability Offence for Failing to Prevent Fraud.
- NatWest and Mastercard Introduce Mobile Virtual Card Payment Solution for Businesses.
- IOSCO Introduces Roadmap for Enhancing Online Safety for Retail Investors.
- Mastercard Aims to Make some big changes by 2030.
- Pomelo Launches a Secure tool for international Money Transfers.
- Faber Launches Third VC fund with $34m First Close, Aims for $64m
- Stanbic, Cardinalstone, 8 others Trade 55% of Equities in NGX..
- Raknida Secures a $100,000 Grant to Support its Expansion into the US Market.
- Ariika Raises a $3 million Series A Extension to Drive its Expansion Across the MENA Region.
News in Nigeria
Commercial, Merchants and Non-Interest banks (CMNIBs) to Accept and Trade ITFCs Under New CBN Guidelines
The Central Bank of Nigeria has introduced the Foreign Currency Disclosure, Deposit, Repatriation, and Investment Scheme, 2024. This scheme encourages Nigerian citizens, both within and outside the country, to voluntarily disclose and repatriate internationally tradable foreign currencies. This initiative aims to enhance transparency in foreign currency holdings and foster economic stability while ensuring regulatory compliance.
Opay has Launched the Large Transaction Shield to Protect Users from Financial Fraud
OPay has introduced the ‘Large Transaction Shield’ to tackle rising fraud risks in digital financial transactions. This feature allows users to set transaction limits between ₦100,000 and ₦300,000. Once the limit is reached, facial verification is required to approve the transaction, with an OTP as a backup if the facial recognition fails. This addresses the growing fraud risk and gives customers more control over high-value transactions. With ₦42.6 billion lost to fraud in Nigeria in Q2 2024, this multi-layered security approach is crucial. By combining biometric authentication with customizable transaction limits, OPay sets a strong precedent for financial institutions to adopt similar measures.
CBN Launches Initiatives to Drive Financial Inclusion
The CBN has unveiled three key initiatives at the second edition of the International Financial Inclusion Conference: the Women Financial Inclusion Dashboard, the Women Entrepreneurs Finance Code, and the Roadmap for the financial inclusion of Forcibly Displaced Persons (FDPs). These initiatives are aimed at reducing financial exclusion among women, youth, and displaced individuals, with a focus on empowering women-owned MSMEs and enhancing economic independence for FDPs.
Moniepoint Set to Disrupt Nigeria’s Financial Industry with Commercial Bank License
Moniepoint, one of Nigeria’s leading fintech unicorns, is seeking a commercial banking license from the Central Bank of Nigeria (CBN),a strategic move that should inspire other fintechs. This could set a precedent for other fintechs riding on microfinance bank licences as their deposits and market spread continue to increase relative to their shareholder capital.Moniepoint’s expansion into loans, savings, and investments highlights how fintechs can drive growth by blending innovation with outreach. By leveraging technology and agent networks, it scales financial inclusion while reshaping the market with diverse, impactful solutions.
CBN to Crack Down on DMB’s for Cash Hoarding
Cash scarcity poses serious detrimental effects to the economy, particularly for Small and medium scale businesses, relying heavily on cash transactions. The Central Bank of Nigeria (CBN) has reminded deposit money banks (DMBs) to ensure responsible cash distribution. DMBs facilitating the flow of mint banknotes to cash hawkers or engaging in cash hoarding will face penalties, starting with a 10% fine on the value of seized cash. Banks are urged to implement internal controls and prioritize cash distribution via ATMs.
Concerns Emerge Over Proposed Investment and Securities Bill of 2024
The proposed Investment and Securities Bill of 2024 presented at the National Assembly has faced opposition from key stakeholders. The Central Bank of Nigeria (CBN) raised concerns about the SEC’s expanded powers, particularly over financial institutions under its jurisdiction, and objected to provisions allowing cash transactions for securities, citing anti-money laundering laws. Finance Minister Wale Edun also warned that the bill could limit the Ministry of Finance’s oversight role, particularly regarding market updates and SEC board appointments. Despite these concerns, SEC’s Director-General defended the bill, highlighting its potential to position Nigeria’s capital market globally. Other stakeholders like PENCOM and the Nigeria Deposit Insurance Corporation supported the bill, with the Senate Committee on Capital Markets promising to incorporate feedback before the final draft is presented.
Nigerian Communications Commission to Introduce Maximum Tariff Plan Limit for Telecom Operators
The Nigerian Communications Commission (NCC) has announced plans to introduce a new policy limiting telecom operators to seven tariff plans each, aiming to simplify the telecom market and improve transparency. This move follows concerns over consumer confusion caused by an overwhelming number of options, with some operators offering up to 145 data and 27 voice plans. The Director of the Consumer Affairs Bureau, explained that the initiative would help consumers make informed decisions by reducing complexity. The NCC will also launch awareness campaigns on data usage, encouraging consumers to monitor their consumption and adjust settings to manage data effectively. This effort aligns with the NCC’s goal of promoting consumer education and enhancing the telecom experience in Nigeria.
Country-Wide Application of the National Lottery Act 2005 Declared Unconstitutional by the Supreme Court
The Supreme Court has nullified the National Lottery Act 2005, ruling it unconstitutional as it exceeded the legislative powers of the National Assembly. The court held that lottery and games of chance fall outside the Exclusive Legislative List, granting states exclusive authority to regulate and control such matters. Companies who were previously regulated under the National Lottery Act of 2005 by the National Lottery Regulatory Commission (NLRC) operating outside the Federal Capital Territory (FCT), the immediate consequence of the Court’s ruling is the invalidation of their licenses issued by the NLRC. The judgment declared that the regulation of lottery businesses falls within the residual powers of state governments rather than the federal government, meaning that businesses licensed under the NLRC no longer hold valid authority to operate in states outside the FCT. This raises a critical issue for companies that had been relying on NLRC-issued licenses to conduct business in various states. In effect, these businesses must cease operations under the old federal framework and instead seek new licenses from the relevant state authorities in each jurisdiction where they operate.
CBN Increases Interest Rates to 27.50%
The Central Bank of Nigeria (CBN) raised the Monetary Policy Rate (MPR) by 25 basis points to 27.50% during its November 2024 Monetary Policy Committee meeting, citing persistent inflation, which stood at 33.87% in October. Governor Olayemi Cardoso emphasized that while headline inflation had shown signs of moderation, core inflation remained high due to structural factors like energy costs and food price pressures. This adjustment underscores the CBN’s focus on controlling inflationary pressures while navigating complex macroeconomic challenges.
CBN Reports Increased Demand for Long-Term Securities Amid Rising Inflation
The CBN’s Q2 2024 report highlights a shift toward longer-term government securities as investors hedge against rising inflation, which hit 34.19%. To attract investors, the CBN raised yields, with NTB stop rates averaging 18.47% (up from 11.97%) and FGN Bond marginal rates increasing to 20.37% (from 17.73%). Robust Open Market Operations (OMO) participation also saw allotments soar to N4.36 trillion with stop rates of 20.62%. These measures reflect the CBN’s inflation-focused monetary policy to stabilize markets and ensure competitive returns for investors.
MoMo PSB is Set to Rival OPay and Paystack in the Market
MTN Nigeria’s MoMo Payment Service Bank (PSB) is applying for Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP) licenses, signaling a shift in telecom-led financial services. With these licenses, MoMo can process payments and manage terminal infrastructure, offering more versatile payment solutions for merchants and customers. This move strengthens competition with banks and fintechs, redefining PSBs by blending financial inclusion with advanced digital payments. Businesses must adapt to or leverage this evolving payment landscape.
Across Africa
Cyber Attack at Bank of Uganda
The Cyber attack on Uganda’s central bank, in which hackers stole millions, offers critical lessons on cybersecurity for financial institutions. First, the breach highlights the need for enhanced security protocols, particularly in preventing unauthorized access through improved intrusion detection systems and encryption methods. Regular security audits, penetration testing, and employee training on cybersecurity are also crucial in preventing attacks, as human error or insider threats often play a significant role in such breaches. Banks should also be vigilant in managing third-party risks, ensuring vendors comply with the same stringent security measures. Additionally, transparent communication during a crisis, as seen with Uganda’s central bank, helps maintain trust with stakeholders and the public. By adopting a comprehensive cybersecurity strategy, banks can better safeguard their systems and avoid similar incidents.
Ethiopia National Bank Mandates Adoption of QR Code Payment Standards for PSPS
The Ethiopian digital payment landscape has witnessed significant development since the inception of the national digital payment strategy in 2021. In a bid to consolidate efforts made so far, the country’s National bank issued a circular mandating the adoption of its Interoperable QR code payment standards, released earlier in April, this year. The adoption of the standards, which seek to harmonise QR code payment systems in the country, ensures seamless and hitch-free mobile payment transactions for customers in the country, invariably representing an opportunity for the payment services industry, with projections estimating as much as a 300% increase in volume of digital payment transactions after successful implementation.
Kenya’s Central Bank to Review Interest Rate in December
The Monetary Policy Committee of the Kenyan central bank will convene for its rate-setting meeting on December 5. In its previous meeting in October, the bank reduced its benchmark lending rate from 12.75% to 12.00%, a decision intended to encourage more credit flow to the private sector.
BNPLs to be Regulated by Kenya’s Central Bank in New Bill
Regulators around the world have paid significant attention to the Buy Now Pay Later (BNPL) schemes, with countries especially in the EU making major legislative attempts at regulating the sector. Kenya legislators seemed to have taken a cue from this in its recent Business Laws (Amendment) Bill 2024. The bill essentially seeks to address some of the consumer protection concerns raised by stakeholders, particularly regarding the usage of BNPL models to perpetrate unfair trade practices.
Kenya Introduces New Tax Bill
Kenya’s latest proposed tax legislation, Tax Law Amendment Bill has been introduced on the floor of the country’s national assembly. The bill seeks to raise the government’s revenue with key revisions to the current tax categories. The bill comes with significant tax obligations particularly for non-resident businesses and individuals, digital businesses and air travel users, amongst others, with proposed tax deductions and exemptions for certain agricultural products and employee income.
Stronger IT Risk Management Requirements for South African FI’s as New Regulation Takes Effect
The Information Technology governance and risk management landscape for financial institutions (FIs) in South Africa is set to take a new phase with the coming into force of the Joint Standard on IT Governance, and Risk Management for Financial institutions, released last year. Amid rising cybersecurity threats, the Standard mandates stronger measures to mitigate third-party risks, build resilient IT systems, and enhance incident reporting.Compliance with these new standards ultimately would require collaborative and proactive efforts particularly for governing bodies, senior management and the IT departments of financial institutions.
Zimbabwe Introduces Data Controller Licensing Requirement for Whatsapp Group Administrators
Zimbabwe’s government has indicted plans to mandate WhatsApp group administrators to obtain licences from the Postal and Telecommunications Regulation Authority (POTRAZ) to curb misinformation and promote accountability, with licence fees ranging from $50 to $2,500, depending on the number of group members. This requirement is however expected to apply only to group administrators processing personal data for commercial purposes.
A WhatsApp-Powered Bank Rolls-out in South Africa
Mama Moneys WhatsApp-powered bank card, launched with Pick n Pay and Access Bank, highlights the rise of social finance in South Africa. Targeting the unbanked and underserved, it offers banking services like purchases, ATM withdrawals, and international transfers via WhatsApp for R99 upfront and R25 monthly. Regulators are increasingly supportive of tech-driven solutions like this, as this move not only boosts financial inclusion but also breaks down barriers like limited access to bank branches, which enhances financial inclusion while addressing barriers such as high fees and limited access to traditional banks.
Egypt Plans to introduce card tokenisation in 2025 to enhance the security of digital payments.
The Central Bank of Egypt (CBE) plans to introduce card tokenisation by 2025, replacing sensitive card details with unique digital tokens to enhance payment security and reduce fraud. This aligns with global and regional fintech trends, such as Nigeria’s AfriGo initiative, which focuses on secure digital payments.
Across the World
TikTok Canada to Shutdown Over National Security Concerns
The Canadian government’s decision to wind up TikTok Canada, driven by national security concerns linked to its parent company ByteDance, raises interesting questions about the nature of corporate exits. While the winding-up order signals regulatory action, it doesn’t necessarily mean TikTok is leaving the market entirely. If TikTok remains available in app stores and continues to be taxed in Canada, the process may be more symbolic than substantive. This highlights the ambiguity in the approach as to whether it’s addressing the security issues at hand or merely serving as a regulatory gesture without significant operational impact.
UK Unveils Corporate Strict Liability Offence for Failing to Prevent Fraud
As the global legal and policy framework on financial crimes prevention continues to evolve, the UK appears to have taken yet another lead with the recent release of its new guidance on the failure to prevent fraud offences. Under the guidance, large organisations will now be liable for fraudulent acts of their associates intended to benefit the organisation or its clients, provided that adequate fraud prevention measures were not put in place by the organisation. Additionally, the guidance equally sets 6 fraud prevention principles that organisations could rely on to demonstrate adequate fraud risk prevention measures, with an effective date of September 2025 for the rules to take effect.
NatWest and Mastercard Introduce Mobile Virtual Card Payment Solution for Businesses
NatWest has teamed up with Mastercard to launch Approval2Buy with Mobile Virtual Cards, a new mobile payment solution for businesses. The service, the first of its kind in Europe, allows companies to issue virtual cards to employees for global use, eliminating the need for physical cards.
International Organization of Securities Commissions (IOSCO) Introduces Roadmap for Enhancing Online Safety for Retail Investors
The International Organization of Securities Commissions (IOSCO) has launched a Roadmap for Retail Investor Online Safety to address the growing risks of fraud, misinformation, and excessive risk tied to technological advances in digital trading and social media. This initiative aims to protect retail investors globally by promoting enhanced investor education and stronger regulatory frameworks. For member countries, the Roadmap will be implemented through their local Securities and Exchange Commissions (SEC) and Capital Market Authorities. In Nigeria, SEC-regulated entities can expect tighter regulations, including enhanced oversight of digital platforms, stronger investor education, and transparency measures, all aimed at improving protection and fostering a safer online investment environment.
Mastercard aims to make some big changes by 2030
Mastercard’s plans to replace physical card numbers and passwords with biometric authentication by 2030 are set to revolutionize online shopping. This innovation combines tokenization with biometrics to ensure secure, seamless transactions, addressing the rising fraud rates in digital payments, which are seven times higher than in-store fraud. Tokenization alone has already boosted global merchant sales by $2 billion monthly. As online security evolves, Visa’s plans to enhance fraud control with similar innovations could signal a need to revisit the EMV (Europay, Mastercard, and Visa) standard. The EMV system, which primarily focuses on securing card-present transactions with chip technology, may require updates to include controls around biometric authentication in coming years.
Pomelo Launches a Secure tool for International Money Transfers.
Pomelo, a US-based company, has launched a secure international money transfer solution designed to optimize payments from the US to the Philippines. The new tool enhances recipient security, ensuring that funds are sent to the intended individual. Since its inception in 2020, Pomelo has focused on facilitating money transfers to bank accounts or GCash wallets in the Philippines via its app, using Pomelo Mastercard or debit cards. The launch follows increased customer demand for more secure transactions, with features like identity verification through government-issued IDs and bank account confirmation via micro-deposit. This initiative aims to improve the security and efficiency of international transfers.
Crypto Scoop
Bitcoin Soars to New High of $75,000 Following Trump’s Victory
On November 6th, as Donald Trump gained momentum in key swing states, both the dollar and Bitcoin surged, fueled by traders betting on his victory and expectations of tax cuts, tariffs, and rising inflation.. Bitcoin hit a record high of $75,371.69, surpassing its March peak. Trump has pledged to make the U.S. the global leader in cryptocurrency prompting speculations as to wider adoption and favourable crypto regulations in the United States.
UK to Finalise Crypto Regulation By 2025
The United Kingdom is set to introduce a draft regulatory framework for cryptocurrency assets in early 2025, as announced at the City & Financial Global Tokenisation Summit in London on 21 November 2024. The timeline was delayed due to a general election earlier this year, which resulted in a change of government. The framework is expected to cover areas such as stablecoins, staking services, and cryptocurrencies, adopting a unified approach to streamline the regulatory process.
Yellow Card secures crypto licence in South Africa
Yellow Card, a pan-African stablecoin infrastructure company that raised $33 million in October, has obtained a Crypto Asset Service Provider (CASP) licence in South Africa, marking a key milestone in its regional growth. In 2024, South Africa eased its regulatory approach to cryptocurrency, with over 138 companies now operating within the country’s regulated crypto ecosystem. The licensing framework, introduced to oversee services like exchanges, payment gateways, wallets, and advisory providers, has supported the processing of $26 billion in crypto transactions between June 2023 and June 2024. This regulation allows the South African government to tax crypto returns and mitigate risks tied to money laundering and terrorist financing.
Sanctions on Tornado Cash Overturned by US Federal Appeals Court
The Fifth Circuit Court of Appeals recently ruled that the sanctions imposed by the United States Department of the Treasury on Tornado Cash’s decentralized and immutable smart contracts were unlawful. The court determined these contracts do not constitute “property” under the International Emergency Economic Powers Act, as they are autonomous and cannot be controlled or owned. This decision limits the regulatory powers of the Treasury and highlights challenges in applying traditional legal frameworks to blockchain technologies. It also sets a significant precedent for businesses operating in decentralized ecosystems, providing clarity while raising questions about future regulatory approaches.
Kenya’s Blockchain Future: New Virtual Asset Regulations in 2024
Kenya’s proposed Virtual Assets Service Providers (VASPs) Bill 2024 seeks to establish a comprehensive regulatory framework for the cryptocurrency and blockchain industry, emphasizing consumer protection, financial integrity, and market stability. The bill mandates licensing for VASPs, requires adherence to strict anti-money laundering and counter-terrorism financing measures, and places the sector under the oversight of the Capital Markets Authority (CMA). It also introduces taxation provisions, reporting obligations, and consumer safeguards to enhance transparency and secure funds within the virtual asset ecosystem. This initiative reflects Kenya’s ambition to balance innovation in blockchain technology with robust regulatory standards to mitigate risks associated with unregulated virtual asset markets.
Rwanda’s Crypto Vision: Regulations Set for 2025
Rwanda plans to introduce cryptocurrency regulations by 2025, as stated by the Governor of the National Bank of Rwanda. The regulations aim to ensure that cryptocurrencies are safely integrated into the financial system, focusing on investor protection and preventing financial crimes. Rwanda is not looking to ban cryptocurrencies but wants to regulate them within a clear framework to promote innovation while maintaining financial security. These regulations are expected to be finalized in early 2025.
Nigerian SEC Flags Marino FX Ltd as Unlicensed Crypto Platform
The Nigerian Securities and Exchange Commission (SEC) has issued a strong warning to investors and the general public regarding the status of Marino FX ltd, a Nigerian based cryptocurrency exchange company. The SEC has clarified that the company is neither licensed nor authorized to operate as a cryptocurrency exchange in Nigeria. The implication is that transactions on the company’s platform could expose investors to financial risks, including fraud and loss of investment.
Nigeria’s Investment and Securities Bill: Integrating Virtual Assets into the Traditional Securities Framework
The Nigerian Investment and Securities Bill seeks to incorporate virtual assets under the definition of securities, marking a significant step toward regulating digital assets within the existing securities framework. This would subject digital assets like cryptocurrencies to the same regulations as traditional securities, including requirements for disclosure, reporting, and investor protection. However, this inclusion raises important questions about how the current regulatory framework, based on the Investment and Securities Act (ISA), will adapt to the unique characteristics of virtual assets, such as decentralization, cross-border transactions, and lack of a central authority. These assets differ fundamentally from traditional securities, and applying the same regulatory rules may pose challenges. Nonetheless, the Bill reflects a growing acknowledgment of the need to integrate digital assets into the broader financial market while maintaining security, stability, and investor protection.
Wolfsberg Group’s Guidance on Digital Assets
The Wolfsberg Group’s recently published FAQs provide important compliance guidelines for financial institutions dealing with digital assets. The guidance highlights the need to adapt traditional Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) measures to the unique characteristics of cryptocurrencies, such as decentralization and anonymity. It emphasizes robust customer due diligence, transaction monitoring, and a risk-based approach to mitigate financial crime risks. The group’s stance reflects growing global recognition of the challenges posed by digital assets and the need for stringent, clear standards to balance innovation with security.
Mergers and Acquisitions
Barclays Purchases Tesco Bank
Barclays, the British multinational bank, has completed its acquisition of Tesco Personal Finance’s retail banking division. The acquisition encompasses a range of services, including credit cards, unsecured personal loans, deposits, and the associated operational infrastructure, all of which will now be managed under Barclays UK. Both Barclays and Tesco Bank will continue to focus on serving the needs of their customers, adapting to an evolving market, and ensuring compliance with local regulatory requirements.
Access Bank to Acquire Mauritius-Based Afrasia Bank
Access Bank UK, a subsidiary of Access Holdings, will acquire a majority stake in Afrasia Bank, Mauritius’ fourth-largest bank by total assets, with over $5.7 billion in assets as of June 30, 2024. This acquisition allows Access Bank UK to expand its personal and corporate banking services in Mauritius, a key financial hub contributing 13.1% to the country’s GDP. The move also positions Mauritius as a strategic base for trade finance and regional connectivity, boosting Access Bank’s cross-border transaction capabilities. This deal follows Access Bank’s broader African expansion strategy, including recent acquisitions in Kenya, Tanzania, and Nigeria. Access Bank CEO Roosevelt Ogbonna emphasised the potential for fostering economic inclusion and trade in the region.
‘Mail to Pay’ Acquires Belgian Fintech POM.
‘Mail to Pay’, a Dutch RPA startup focused on debt collection, has acquired Belgian fintech POM, a digital payment services provider, to unify operations under the POM brand in Belgium. The acquisition enables POM’s customers to leverage Mail to Pay’s functionality for automated and personalized invoicing. RPA adoption continues to rise in finance and commerce, streamlining repetitive talks, with new machine learning models poised to expand its capabilities further.
Deals and Raises
- Faber Launches third VC fund with $34m First Close, Aims for $64m
- Stanbic, Cardinalstone, 8 others trade 55% of equities in NGX
- Raknida Secures a $100,000 Grant to Support its Expansion into the US Market.
- Ariika Raises a $3 million Series A Extension to Drive its Expansion Across the MENA Region.
Have questions or insights about the regulatory landscape in your region? Reach out to us on any of our social media handles, email and we would be available to help. Also share your thoughts in the comments below and let’s continue the conversation! Please note that the information provided in this article does not constitute legal or financial advice and should not be construed as such. For legal advice specific to your situation, please consult a legal practitioner.
