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Under the new 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 intended to bring forex operators serving Nigerian investors under a clear regulatory framework, particularly as more online trading platforms operate across international borders.
The proposed regulations classify several categories of operators as “Regulated Entities”. These include Introducing Brokers, online forex brokers and broker-dealers, as well as technology and platform providers.
The framework also specifically covers offshore companies 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 also covers 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 further identified the use of Nigeria-specific features as an indication that an offshore operator is targeting the country’s market. These features include accepting or displaying the naira, referencing the Nigerian market, providing Nigerian contact details or using promotional materials specifically targeted at Nigerians.
Offshore entities with representatives, agents, affiliates, Introducing Brokers, training providers or customer-support channels based in Nigeria would also fall within the proposed regulatory framework.
The rules state that an offshore company could also come under SEC regulation if it has Nigerian residents as clients or conducts business in a way that suggests an intention to offer online forex CFD trading services to Nigerians.
With the proposed framework, the SEC is seeking to address possible regulatory gaps involving forex platforms based outside Nigeria that actively market their services to and serve Nigerian investors.
The Commission added that any person who carries out, or claims to carry out, a regulated activity under the proposed rules would be subject to the framework
