Exclusive: Details Revealed On How Exchange Companies Operate Under The Supervision Of The Central Bank Of Libya

The Central Bank of Libya revealed to our source a document outlining how exchange companies operate under its supervision. The document aims to clarify the mechanism for using the platform and to regulate procedures for executing daily operations after obtaining final authorization from the Central Bank. It also explains how exchange companies operate, particularly with regard to individuals’ foreign currency entitlements for personal purposes.

The Central Bank explained that the document includes the following definitions:

1. Central Bank: The Central Bank of Libya, as the supervisory and regulatory authority overseeing the exchange companies’ platform and issuing the rules and instructions governing its operation.
2. Platform: The electronic exchange companies’ platform approved by the Central Bank of Libya, designated for executing and managing foreign currency buying and selling operations and monitoring related transactions.
3. Exchange Company: Any company licensed by the Central Bank of Libya to conduct exchange activities and approved to operate on the platform in accordance with established procedures.
4. Login Credentials: Electronic access credentials issued by the Central Bank of Libya that authorize the exchange company or its approved user to use the platform according to defined permissions.
5. Operations: All financial transactions executed through the platform, including, in particular, cash buying and selling of foreign currency, transfers, or any other methods approved by the Central Bank of Libya.
6. Instructions and Regulations: All laws, regulations, circulars, and instructions issued by the Central Bank of Libya related to regulating exchange activities and use of the platform.

The Central Bank added that the system structure consists of the following main components:

1. Foreign Currency Booking Platform (FCMS): A central platform dedicated to individuals, enabling citizens to submit requests to reserve foreign currency for personal purposes. Requests are submitted through approved exchange companies linked to the bank holding the citizen’s account. The platform is connected to exchange companies and commercial banks to execute approved requests and is supervised, regulated, and operated by the Central Bank of Libya.
2. Commercial Banks Platform (FCMS Banks): A platform dedicated to commercial banks, enabling them to review daily contracts received from exchange companies, approve or reject contracts in accordance with approved regulations, monitor execution status, and access operational reports. It serves as an executive channel for banks within the central system and is supervised, regulated, and operated by the Central Bank of Libya.

The Central Bank also defined the Exchange Houses Platform (FX House Platform) as an operational platform dedicated to exchange companies, enabling them to create and manage daily contracts linked to the approved exchange rate, execute operations resulting from approved contracts, receive and execute booking requests issued from the FCMS platform, and track the status of contracts and requests. The platform serves as an official integration channel with commercial banks and the central system and is supervised, regulated, and operated by the Central Bank of Libya.

The Central Bank clarified that exchange companies carry out multiple activities, including selling foreign currency in cash to citizens through the system and executing exchange operations related to citizens’ personal-purpose reservations requested via the platform.

Scope and Role of the System:
The current role of the system includes regulating cash buying and selling of foreign currency conducted through the Central Bank, organizing daily contracts linked to the approved exchange rate, managing and executing operations resulting from approved citizen reservations, and enabling regulatory authorities to monitor and audit executed transactions.

Operating Mechanism:
Regarding registration and platform access, each company must request the appointment of a system administrator (Admin) specific to the company, subject to the following conditions: the request must be signed by the company’s general manager, accompanied by the responsible person’s details (copy of national ID, copy of passport, phone number), and include a non-disclosure agreement prepared by the Central Bank of Libya and signed by the responsible person.

Daily Operations:

• (Time Window 1 – Exchange Companies): After the Central Bank uploads the exchange rate, the company enters a new foreign currency contract specifying the amount to be sold and the selling price, provided it does not exceed the permitted margin from the official exchange rate. Companies may enter multiple contracts, provided their total value does not exceed the Libyan dinar balance available in the company’s account at the commercial bank.
• (Time Window 2 – Commercial Banks): The commercial bank reserves the Libyan dinar value of the contracts in the company’s account and responds to the Central Bank accordingly.
• (Time Window 3 – Customers): Customers log into the Central Bank’s platform and request the amount for personal purposes, choosing the method of obtaining foreign currency.
  • Option One: Cash / Fast Transfers: All companies offering fast transfer services are displayed, sorted from the lowest to the highest price. Once the full contract value is reserved, the company is removed from the list.
  • Option Two: Bank Deposit / Card Top-Up: All companies where the customer has a matching account in the same bank as the company are displayed. Once the full contract value is reserved, the company is removed from the list.
• (Time Window 3 – Companies): Companies receive all customer requests and collect the Libyan dinar value from customers either in cash (within a Central Bank–specified percentage), by bank transfer, or by cheque (within a specified percentage), then approve the customer’s request on the Central Bank’s platform.
• (Time Window 4 – Central Bank of Libya): The Central Bank sells the approved reserved foreign currency amounts to commercial banks, forwards a list of foreign currency amounts due to each company, rejects remaining contract values not requested for reservation, and rejects reservations not responded to by companies.
• (Time Window 5 – Commercial Banks): Commercial banks deposit the foreign currency amounts into companies’ accounts and notify them accordingly.
• (Time Window 6 – Companies): Companies execute the approved reservations for customers.