The Securities and Exchange Commission (SEC) has moved to tighten oversight of online foreign exchange (forex) trading in Nigeria, extending its proposed regulatory framework to both domestic operators and offshore entities that target Nigerian residents.
Under the rules released yesterday, 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 aimed at bringing operators serving Nigerian investors within a defined regulatory framework, particularly as online forex trading platforms increasingly operate across borders.
The rules identify several categories of persons as “Regulated Entities”, including Introducing Brokers, online forex brokers and broker-dealers, as well as technology and platform providers.
Significantly, the framework also captures offshore entities that provide 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 listed the use of Nigerian-specific features as an indication that an offshore operator is targeting the Nigerian market. These include the use of the naira, Nigerian market references, Nigerian contact details or Nigeria-specific promotional materials in connection with the services.
Similarly, offshore entities that maintain representatives, agents, affiliates, introducing brokers, training providers or customer-support channels in Nigeria would come under the regulatory framework.
The rules further provide that an offshore entity could be subject to regulation where it has clients resident in Nigeria or otherwise conducts business in a manner indicating an intention to provide online forex CFD trading services to Nigerians.
The SEC’s approach effectively seeks to close potential regulatory gaps that could arise when online forex operators are domiciled outside Nigeria but actively solicit and serve Nigerian investors.
The Commission also stated that any person who carries on, or purports to carry on, a regulated activity under the rules would fall within the scope of the framework.
