Nigeria’s Securities and Exchange Commission (SEC) has moved to tighten regulation of online foreign exchange trading, including platforms based outside the country that target Nigerian investors.
Under new rules released on Tuesday, the SEC said its regulatory framework would apply to anyone offering online forex trading services to people resident in Nigeria, regardless of where the operator is incorporated or based.
The commission said the move was necessary as the growth of online forex platforms has increasingly blurred national borders and created potential gaps in investor protection.
The framework identifies several categories of operators as regulated entities, including introducing brokers, online forex brokers and broker-dealers, as well as technology and platform providers.
It also specifically brings offshore companies offering online forex contracts for difference (CFD) trading to Nigerians under the SEC’s regulatory scope.
An offshore operator would be considered to be targeting Nigeria if it lists the country as an accessible or supported market on its website, mobile application, trading platform or client registration portal.
The rules also cover offshore platforms that allow Nigerian residents to open or maintain trading accounts.
The SEC said an operator could also come under the framework if it markets or promotes its services to Nigerians through local influencers, affiliates, introducing brokers, training providers, seminars, webinars, social media platforms or online advertising campaigns.
The use of Nigeria-specific features could also indicate that an offshore platform is targeting the Nigerian market.
These include accepting or displaying the naira, referring specifically to the Nigerian market, providing Nigerian contact details or using promotional materials designed specifically for Nigerian customers.
Offshore operators with representatives, agents, affiliates, introducing brokers, training providers or customer-support channels in Nigeria would also fall within the regulatory framework.
The SEC said the rules could apply where an offshore entity has Nigerian residents as clients or otherwise conducts its business in a way that indicates an intention to provide online forex CFD services to Nigerians.
The move represents an attempt by the commission to close regulatory loopholes that could allow offshore forex operators to solicit Nigerian investors while remaining outside the country’s direct regulatory reach.
The SEC added that anyone who carries out, or claims to carry out, an activity covered by the rules would be subject to the framework.
