The Securities and Exchange Commission (SEC) has introduced new rules aimed at strengthening the regulation of online foreign exchange (forex) trading in Nigeria, with the framework covering both local operators and offshore entities targeting Nigerian residents.
Under the rules released on Tuesday, the SEC said: “The regulations would apply throughout Nigeria and cover all persons engaging in or offering online forex trading services to residents of Nigeria, irrespective of whether the platform or medium is incorporated in Nigeria or operates from outside the country.”
The Commission said the move is intended to bring operators serving Nigerian investors under a clearly defined regulatory framework, particularly as online forex platforms continue to expand their cross-border operations.
The rules classify several categories of operators as “Regulated Entities”, including Introducing Brokers, online forex brokers and broker-dealers, as well as technology and platform providers.
The framework also specifically covers offshore entities offering online forex CFD trading services to Nigerians.
According to the SEC: “An offshore entity will fall under the rules if it lists Nigeria as an accessible or supported country on its website, mobile application, trading platform or client onboarding portal.”
The Commission said: “Offshore operators would also be covered where they permit people resident in Nigeria to open or maintain trading accounts.
The regulatory scope extends further to companies that advertise, market or promote their services to Nigerians through Nigerian influencers, affiliates, introducing brokers, training providers, seminars, webinars, social media pages or online campaigns.”
The SEC also identified the use of Nigeria-specific features as an indication that an offshore operator is targeting the country’s market. Such features include accepting the naira, referring specifically to the Nigerian market, providing Nigerian contact details or using Nigeria-specific promotional materials in connection with the services.
Offshore entities that maintain representatives, agents, affiliates, introducing brokers, training providers or customer-support channels in Nigeria would similarly fall under the regulatory framework.
The rules further state that an offshore entity could be subject to regulation if it has clients resident in Nigeria or conducts its business in a manner that indicates an intention to provide online forex CFD trading services to Nigerians.
The SEC’s approach is designed to address potential regulatory gaps that may arise when online forex operators are based outside Nigeria but actively solicit and provide services to Nigerian investors.
The Commission also stated that any person who carries on, or claims to carry on, a regulated activity under the rules would be covered by the framework.