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Friday, May 20, 2022

CBN unveils tips for funds system companies | The Guardian Nigeria Information


The Central Financial institution of Nigeria (CBN) has unveiled tips for licensing and regulation of funds system holding firms (PSHC), stressing that firms should exist as non-operating entities within the ecosystem.

The rule is a follow-up to an earlier template on new license categorisation, which required firms with an curiosity in switching/processing and cellular cash service to arrange holding constructions.

In an accompanying round issued yesterday and signed by the Director, Funds System Administration Division, Musa Jimoh, the CBN insisted that PSHC should keep a minimal of two subsidiaries with a concentrate on switching and cellular cash providers.

The rule lined broad areas equivalent to licensing course of/necessities, possession, company governance, permissible/non-permissible actions and prudential regulation.

“For the aim of this regulation, a PSHC is an organization whose principal object clause embody the enterprise of a holding firm arrange for the needs of creating and managing fairness funding in two or extra firms, being its subsidiaries, that are funds service suppliers throughout the next classes Cell Cash Operations, switching/processing and cost answer providers.

“The PSHC shall be non-operating, current solely to hold out funding in authorised subsidiaries with out partaking within the day-to-day administration and operations of subsidiaries,” the regulator famous within the new doc.

In line with the Financial institution, the approval course of shall be in two phases – approval-in-principle and closing licence. Candidates are required to pay non-refundable software charges of N1 million for the primary stage of approval and N5 million for the ultimate licence.

Regarding possession, it said: “Prior approval of the CBN shall be obtained for any shareholding of 5 per cent and above, or any change in possession that leads to a change accountable for the PSHC.

“The place such shares are acquired via the secondary market, the PSHC shall apply for approval from the CBN inside seven days of the acquisition.

“Subsidiaries of a PSHC are prohibited from buying shares within the PSHC. Subsidiaries are prohibited from buying shares of different subsidiaries of their guardian PSHC.”

The place a PSHC loses management of any of the 2 funds providers subsidiaries for a interval exceeding six consecutive months, it maintained, “the PSHC shall stop to be a PSHC and will likely be required to return its licence to the regulator for cancellation”.

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