CBN Proposes New Rules for Financial Holding Companies

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) wants to tighten regulation and oversight of Financial Holding Companies (HoldCos) by updating the rules that have governed them since 2014, as it released an exposure draft on revised guidelines for licensing and regulating these establishments.

In a circular posted on its website, the apex bank said it had identified areas within the extant guidelines for the licensing and regulation of HoldCos, which it issued in August 2014, “that require enhancement to strengthen the operational effectiveness and regulatory oversight of Financial Holding Companies.”

The banking sector regulator said a review of the guidelines became necessary to address observed gaps and align with evolving regulatory and market developments.

According to the circular, the key revisions have to do with areas such as strengthening capital requirements, regulation of shared services, eligibility criteria, organisational structure and ownership and control requirements.

Specifically, on strengthening capital requirements, the circular said that there is a need for “clarification and enhancement of minimum capital requirements for FHCs to ensure their capacity to serve as a reliable source of financial strength to their subsidiaries.”

For regulation of shared services, the CBN said the review was aimed at addressing identified gaps in shared services arrangements, “to prevent potential abuse or undue advantage over banking subsidiaries.”

The apex bank, which said that it reviewed the guidelines to establish clear eligibility requirements for promoters seeking to set up FHCs, also disclosed that the review was carried out to streamline the structure of FHCs by allowing them, rather than their Nigerian banking subsidiaries, to directly hold equity interests in foreign subsidiaries.

Furthermore, on ownership and control requirements, the CBN said the guidelines were reviewed to require FHCs, “to hold a minimum of 51 per cent equity stake in each subsidiary and to be registered as a person with significant control by the appropriate corporate registration authority.”

The regulator stated that stakeholders and members of the public are expected to review and submit the draft revised guidelines and submit their comments on or before July 09, 2026.

According to the circular, the revised guidelines “will supersede the CBN Guidelines for Licensing and Regulation of Financial Holding Companies in Nigeria issued in August 2014 and the CBN’s Circular to all banks on the Definition and Structure of Holding Companies in Pursuance of the New Banking Model, issued in December 2011.”