NIGERIA’S ANTI-COMPETITION REGIME: KEY COMPLIANCE CONSIDERATIONS FOR MIDSTREAM AND DOWNSTREAM PETROLEUM OPERATORS IN NIGERIA

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BY ADERONKE ALEX-ADEDIPE & OLUWAYEMI IBIRINDE

Introduction 

On 6th August 2026, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (“NMDPRA”) launched a stakeholder consultation in relation to the proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behavior Regulations, 2026 (the “Regulations”). Comprising 138 provisions across 23 parts, the Regulations seek to introduce the first dedicated, detailed competition-law framework governing anti-competitive conduct in Nigeria’s midstream and downstream petroleum sector. 

Historically, competition concerns in the sector including price-fixing, market allocation and abuse of dominant positions by vertically integrated operators were addressed only indirectly, through the general provisions of the Petroleum Industry Act and the oversight of the Federal Competition and Consumer Protection Commission (FCCPC”). The Regulations seek to close this gap by translating the PIA’s competition provisions into sector-specific rules, while establishing a coordination framework with the FCCPC through a recently signed Memorandum of Understanding. 

In this newsletter, we examine the key provisions of the Regulations and highlight some of the legal and commercial considerations for operators. 

Who Do the Regulations Apply To? 

The Regulations apply broadly to licensees and permit holders operating across the midstream and downstream petroleum value chain. Specifically, they apply to: 

  1. operators engaged in pricing, marketing and distribution of petroleum products (marketers and retailers); 
  2. owners and controllers of essential petroleum infrastructure, including pipelines, storage terminals, jetties, bulk-loading facilities and depots;
  3. vertically integrated operators and their affiliates, including entities engaged in intra-group transactions; and 
  4. operators participating in mergers, acquisitions, or joint ventures within the sector. 

The regulatory focus is therefore not on any single category of licensee, but on any conduct, agreement or arrangement capable of preventing, restricting or distorting competition in the sector. 

What are the Key Prohibitions? 

1. Prohibition on Anti-Competitive Conduct (Regulation 3) 

The foundation of the regime is Regulation 3, which prohibits any conduct, agreement, arrangement, understanding, decision or practice that has the object or effect of preventing, restricting or distorting competition regardless of whether it is formalised in writing or conducted informally. 

2. Price-Fixing, Market Allocation and Bid-Rigging 

Competing operators are prohibited from coordinating pump prices, ex-depot prices, margins, discounts, freight charges, supply or output levels, territories, customer allocation and tender submissions. 

3. Restrictive Commercial Arrangements 

Exclusive supply agreements, long-term contracts, take-or-pay arrangements, tying and bundling, loyalty rebates, minimum-volume commitments, resale price maintenance and franchise restrictions may be scrutinised where they substantially lessen competition with focus is not on whether they foreclose market access or distort competitive conditions. 

4. Abuse of Dominance 

The Regulations do not prohibit market dominance itself, only its abuse. Dedicated provisions address vertically integrated firms, affiliate transactions and cross-subsidisation. 

5. Infrastructure Access and Transparency 

Controllers of essential infrastructure are prohibited from unjustifiably refusing, delaying or obstructing access by qualified third parties. Access must be transparent, non-discriminatory, and based only on legitimate technical, safety and creditworthiness considerations. Operators must also publish tariffs, fees and service conditions; hidden surcharges, secret discounts and undisclosed preferential arrangements are prohibited. 

6. Mergers and Digital Markets 

The Regulations introduce a merger and acquisition review mechanism empowering the NMDPRA to assess transactions for effects on competition, market entry and consumer welfare, alongside emerging oversight of digital markets including shared platforms, data-sharing and algorithmic pricing risks. 

Compliance Considerations 

Pending finalisation of the Regulations, operators in the midstream and downstream sector should consider the following: 

  1. Operators should audit supply agreements, distribution contracts and pricing arrangements with competitors for provisions that could be characterised as price-fixing, market allocation, or bid-rigging. 
  2. Vertically integrated operators and infrastructure owners should evaluate whether their current market position could expose them to “abuse of dominance” scrutiny, particularly regarding third-party infrastructure access. 
  3. Owners of pipelines, depots, terminals and jetties should ensure access terms are documented, published, and based on objective technical and safety criteria. 
  4. Organisations should establish internal governance procedures including competition-law training and pricing-communication protocols to monitor ongoing compliance ahead of finalisation. 
  5. Given that NMDPRA has invited stakeholder input on the clarity, practicality and impact of specific provisions, operators should consider making submissions to flag ambiguous provisions before the Regulations are finalised. 

Penalties for non-compliance 

The draft Regulations introduce significant sanctions for non-compliance. Operators found guilty of serious offences, including price-fixing, bid-rigging, market allocation and abuse of market dominance, may be fined between 3–5% of annual turnover. Persistent offenders may face licence suspension or revocation while the NMDPRA may impose daily penalties on operators that fail to comply or continue prohibited conduct. 

Conclusion 

The NMDPRA indicates it is actively reviewing submissions ahead of finalization. Therefore, stakeholders should prioritise reviewing their commercial arrangements, infrastructure access policies, and internal compliance frameworks.  

Operators who engage proactively with the consultation process, and who position themselves for compliance ahead of finalisation, will be better placed to navigate this significant shift in Nigeria’s petroleum regulatory landscape.

FOREX TRADING IN NIGERIA: THE IMPLICATIONS OF SEC PROPOSED RULES ON ONLINE FOREX TRADING FOR TECHNOLOGY AND PLATFORM PROVIDERS

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BY SEUN TIMI-KOLEOLU & PROMISE ITAH

Introduction

The Securities and Exchange Commission (“SEC”) has proposed rules on Online Forex Trading and Contracts for Difference (“CFDs”) (the “Proposed Rules”), introducing a regulatory framework for businesses involved in the provision of online Forex and CFD trading services in Nigeria.

The Proposed Rules will affect not only Forex brokers and CFD providers, but also the companies that provide the technology they use. This includes companies that provide the websites and apps where users open trading accounts; check currency and asset prices; place trades; and manage their investments. It may also include companies that host these platforms or provide the technology and systems that allow them to operate.

In this newsletter, we highlight key provisions of the Proposed Rules relevant to businesses that provide technology or platforms for online Forex and CFD trading.

What are Online Forex Trading and CFDS?

Under the Proposed Rules, Forex/FX/Foreign Exchange means the exchange of one national currency for another. Online forex trading involves trading foreign currencies through an online platform.

A Contract for Difference (CFD) is a derivative that allows a person to trade based on changes in the price of an underlying asset without owning the asset.

Key Highlights of the Proposed Rules

  1. Technology and Platform Providers Within the Regulatory Framework

Under the Proposed Rules, technology and platform providers are recognised as a distinct category of regulated persons. This category appears broad enough to cover businesses that provide trading infrastructure, software, platforms, systems or other technology used in connection with online Forex and CFD trading.

The Proposed Rules also apply to offshore businesses that target or provide services to Nigerian residents. This may arise where a platform permits Nigerian residents to open accounts, advertises its services to Nigerians, uses Nigerian currency or references, engages Nigerian influencers or affiliates, or otherwise demonstrates an intention to serve the Nigerian market.

Accordingly, a technology provider may need to assess its activities carefully where its platform is used by a Forex broker or CFD operator serving Nigerian residents. The fact that the provider does not deal directly with clients or execute trades may not, by itself, take it outside the scope of the Proposed Rules.

  1. Registration and Capital Requirements

A person may not carry on, or hold itself out as carrying on, the business of a technology or platform provider within the scope of the Proposed Rules without registration with the SEC.

For technology and platform providers, the Proposed Rules contemplate a minimum paid-up capital of ₦5 billion. The provider must also be incorporated in Nigeria or be a foreign company with an appropriate local presence in Nigeria.

The proposed registration fees comprise:

  • Application fee – ₦100,000;
  • Processing fee – ₦300,000; and
  • Registration fee for a Category C technology or platform provider – ₦30 million.

In addition, a registered provider would be required to maintain professional indemnity insurance of not less than 20% of the applicable minimum capital per claim, or provide an equivalent security acceptable to the SEC.

  1. Operational and Technology Standards

The Proposed Rules place significant emphasis on the reliability, security and resilience of trading platforms. Technology providers would be expected to maintain systems that support the continuous and orderly operation of trading activities. The key requirements include:

  • Platform availability: Platforms must maintain a minimum uptime of 99.5% during trading hours.
  • Cybersecurity: Providers must have appropriate security measures in place, including end-to-end encryption of client and trade data, multi-factor authentication, regular penetration testing, and systems for monitoring and responding to security threats.
  • Business continuity and disaster recovery: Providers must maintain business continuity and disaster recovery arrangements, test these arrangements annually and submit the relevant certification to the SEC.
  • Record-keeping: Providers must retain audit trails of transactions and other relevant activities for at least seven years. Records must be readily retrievable within 24 hours and may include client information, orders, transactions, confirmations, electronic communications, financial records, AML records and risk disclosures.

These requirements may have implications for the design and operation of trading platforms and should be considered in the contractual arrangements between technology providers and the brokers or other regulated entities using their systems.

  1. Data Protection and Data Localisation

The Proposed Rules also set requirements for the storage and protection of client and trading data. Client order data must be stored in Nigeria or another jurisdiction approved by the SEC, in line with applicable data protection requirements. Technology providers may therefore need to review their data hosting arrangements, third-party access and cross-border data transfers.

  1. White-Label Platforms and Outsourced Technology

The Proposed Rules are also relevant to businesses that provide white-label platforms or outsourced technology solutions. Where a provider supplies the infrastructure used by a broker or trading operator, the parties will need to consider how responsibility for regulatory compliance is allocated. This should include responsibility for:

  • platform availability and performance;
  • cybersecurity and access controls;
  • data storage and processing;
  • incident reporting;
  • recordkeeping and audit trails;
  • business continuity and disaster recovery;
  • regulatory inspections and information requests;
  • use of subcontractors and external technology providers; and
  • suspension, termination or migration of the platform.

The Proposed Rules require prior SEC approval for certain material changes, including changes to a trading platform or technology provider. This means that brokers and other regulated entities may need to obtain SEC approval before changing their technology providers or making significant changes to their trading platform.

Technology agreements should therefore be reviewed to ensure that they contain appropriate provisions dealing with regulatory cooperation, audit rights, service levels, incident escalation, data access, business continuity and orderly transition.

  1. Incident Reporting and Regulatory Cooperation

A technology provider would be required to notify the SEC within 24 hours of a material system breach, outage or cybersecurity incident.

This requirement creates a need for clear internal escalation procedures and contractual reporting arrangements. A broker may not become aware of a system incident immediately, while a technology provider may not have sufficient information to determine whether an incident is material from a regulatory perspective.

Technology providers and their regulated clients should therefore agree in advance on:

  • What constitutes a reportable incident;
  • How quickly incidents must be escalated;
  • Who is responsible for notifying the SEC;
  • The information to be included in an incident report;
  • How affected clients will be notified; and
  • The steps required to contain, investigate and remedy the incident.

The Proposed Rules also contemplate independent systems audits and penetration testing reports for proprietary and white-labelled platforms. Providers should expect increased scrutiny of their technology architecture, security controls, access management, development processes and third-party dependencies.

  1. What Technology Providers Should Consider

Businesses providing technology or platform services to online Forex and CFD operators should begin reviewing their current operations against the proposed framework. In particular, they should:

  • assess their regulatory classification and determine whether their services fall within the proposed definition of a technology or platform provider;
  • review their Nigerian market exposure, including whether their platforms are accessible to Nigerian residents or marketed through Nigerian brokers, affiliates, influencers or other intermediaries;
  • evaluate their capital and local presence requirements, particularly where they operate through a foreign company or provide services on a white-label basis;
  • review their technology infrastructure, including uptime, encryption, authentication, monitoring, penetration testing and incident response arrangements;
  • assess their data arrangements, including data hosting locations, backups, cross-border transfers, subcontractors and compliance with applicable data protection laws;
  • update their contractual arrangements with brokers and other regulated entities to address service levels, audit rights, incident reporting, regulatory access, business continuity and liability;
  • prepare for enhanced recordkeeping and audit requirements, including the retention and retrieval of client, transaction and system records for at least seven years.

Conclusion

The SEC’s Proposed Rules signal closer regulation of online Forex and CFD trading in Nigeria, including the technology infrastructure supporting such activities. While the provisions highlighted in this newsletter are not exhaustive, the proposed requirements may have significant implications for both local and foreign businesses operating in this space.

Businesses should therefore review their regulatory position and relevant operations ahead of the final rules. As the proposals remain subject to change, businesses should continue to monitor developments and assess any implications based on the nature of their services and Nigerian market exposure.

NERC’S TRANSFER OF AKWA IBOM’S ELECTRICITY OVERSIGHT: WHAT THIS MEANS FOR LICENSEES, INVESTORS AND CONSUMERS

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BY ADERONKE ALEX-ADEDIPE & EFE OKPARAVERO

 

Introduction

On 18 August 2026, the Nigerian Electricity Regulatory Commission (“NERC”) issued Order No. NERC/2026/087, transferring regulatory oversight of Akwa Ibom State’s (“the State”) intrastate electricity market to the Akwa Ibom State Electricity Regulatory Commission (“AKSERC”).

The Order was issued pursuant to Section 230(2) of the Electricity Act 2023 (“Electricity Act”), which provides, in essence, that a State may regulate intrastate electricity activities and upon the state’s request and satisfaction of the statutory conditions, NERC may transfer regulatory oversight of intrastate electricity activities to the state regulator.

In furtherance of the Electricity Act, in January 2025, the Akwa Ibom State Electricity Law was enacted, establishing the AKSERC, while AKSERC also formally engaged NERC on the development and transition of the State electricity market. Following these steps, NERC issued the Order, marking the commencement of the transition of regulatory oversight to AKSERC.

The Nature and Impact of the Transfer

The transfer moves regulatory oversight only in respect of intra-state electricity activities from NERC to AKSERC. This means that electricity operators whose activities fall exclusively within the State, will increasingly deal with the State regulator in respect of licensing, regulation, compliance and other matters falling within the State electricity market.

The transfer, however, is not yet operational, as the Order provides for a transition period ending on 17 February 2027, during which certain implementation steps must still be completed.

Given that the Port Harcourt Electricity Distribution Plc (“PHEDC”) currently oversees electricity distribution in the State, NERC has mandated PHEDC to incorporate a subsidiary, i.e  “PHEDC SubCo”, which will assume responsibility for electricity supply and distribution within the State.

Implications for Licensees and Operators

For existing licensees and operators, the focus is on the regulatory transition, which will require businesses to assess their existing licences, regulatory obligations, contracts, assets and operating arrangements against the emerging regulatory framework.

Existing licensees should therefore undertake a regulatory-gap assessment in respect of their regulatory and contractual obligations.

A New Regulatory Environment for Investors

For investors, the transfer presents both opportunities and potential regulatory risks. The establishment of a dedicated State regulator provides greater control over the development of its electricity market and creates an institutional framework through which the State can facilitate investment in generation, distribution and supply infrastructure.

AKSERC has itself indicated that it intends to adapt regulatory frameworks to the State’s specific electricity needs, while NERC has committed to providing technical assistance during the transition. This could make the State particularly attractive to investors interested in the State’s electricity ecosystem.

In the same vein, the transition introduces a new set of questions for investors which would need to be determined including: (i) whether its proposed activities are intrastate or interstate in character; (ii) whether the nature of activities requires a State or federal licence; (iii) which regulator has tariff and consumer-protection jurisdiction; (iv) whether access to the national grid is involved and (v) how existing federal licences and contractual rights will be treated during the transition.

For investors therefore, regulatory certainty will be as important as the availability of opportunities.

Implication for Consumers

For consumers, the most important point is that the transfer does not immediately give effect to a change in tariffs. PHEDC will continue to supply meters and bill consumers during the transition. These operational responsibilities are, however, expected to be transferred to PHEDC SubCo as part of the transition process. The longer-term significance is the creation of a regulator with a direct mandate over the State’s electricity market as upon completion of the transition by February 2027, regulatory responsibility for its intrastate electricity market will pass from NERC to AKSERC. If effectively implemented, State-level regulation could improve service quality, electricity access, consumer complaints and investment in underserved areas.

Next Steps for Operators

The transition period presents an opportunity for existing and prospective operators to prepare before the February 2027 completion deadline. Electricity operators in the State should consider:

  1. Reviewing regulatory status: Determine whether existing licences remain applicable and identify any new State licensing requirements.
  2. Mapping regulatory jurisdiction: Separate activities falling under AKSERC’s intrastate jurisdiction from those remaining under NERC.
  3. Reviewing contracts: Assess existing PPAs, supply agreements, distribution arrangements, financing documents and other contracts for provisions affected by the transition.
  4. Assessing compliance requirements: Monitor AKSERC’s emerging regulations, licensing procedures, tariff frameworks and consumer-protection requirements.
  5. Reviewing investment structures: Prospective investors should assess whether their proposed structures are appropriately aligned with the State and federal regulatory framework.

Conclusion

The Electricity Act provides the legal basis for States to establish and regulate intrastate electricity markets, while NERC continues to perform a central regulatory role over electricity activities that remain interstate, international in character or involves the national grid.

Consequently, businesses operating across multiple States may face a more complex regulatory landscape. This makes regulatory structuring and licensing analysis increasingly important for operators.

The transfer of regulatory oversight to AKSERC marks a further step in the decentralisation of Nigeria’s electricity market, with Akwa Ibom becoming the 17th State to assume regulatory oversight of its electricity market.

The transition by 2027 will therefore be particularly important, as the impact of decentralisation will not be determined solely by the transfer of regulatory authority, but by how effectively AKSERC exercises that authority, how clearly the respective roles of AKSERC and NERC are defined, and whether the transition ultimately delivers improved service and greater consumer satisfaction.

 

NIGERIA’S PROPOSED RULES ON DIGITAL AND VIRTUAL ASSETS: KEY PROVISIONS AND IMPLICATION FOR BUSINESSES

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BY SEUN TIMI-KOLEOLU & HILLARY OKOROTIE

Introduction 

On August 20, 2026, the Securities and Exchange Commission (“SEC”) published the Proposed Rules on Digital and Virtual Assets Operations, Custody and Markets (the “Proposed Rules”). The Proposed Rules seek to establish a comprehensive regulatory framework for digital and virtual asset activities in Nigeria, including the issuance, offering, trading, custody, transfer and settlement of digital and virtual assets. 

The Proposed Rules set out: the categories of activities to which they apply; the prescribed requirements for conducting business in relation to digital and virtual assets; and regulatory requirements relating to the issuance and trading of digital assets. 

In this newsletter, we provide an overview of the key provisions of the Proposed Rules and their potential implication for businesses operating within Nigeria’s digital and virtual asset ecosystem. 

Key Provisions and Implication of the Proposed Rules 

Where the proposed rules are implemented the following are key provisions that players in the digital and  virtual assets space should take note of when operating in the Nigerian market. 

1. Application of the Proposed Rules 

The Proposed Rules will apply to persons and businesses operating in Nigeria, as well as persons providing services to Nigerian residents or the Nigerian market through digital channels in relation with the issuance, trading, custody and management of digital and virtual assets. 

The Proposed Rules will also apply to persons and entities facilitating any aspect of digital and virtual asset services, including Virtual Asset Service Providers (“VASPs”) and Digital Asset Custodians(“DAO”). 

2. Obligations of Regulated Entities 

Regulated entities are required to comply with various obligations in the conduct of their business and in the issuance, offering, and trading of digital assets in Nigeria. These obligations include, amongst others, the following: 

  1. Advertisement and Promotion: In connection with the issuance and offering of digital assets in Nigeria, entities must ensure that no publication, advertisement, or promotional material is made in respect of a digital asset unless the asset has been duly registered with SEC. Where an entity advertises or promotes a registered digital asset, such advertisement or promotional content must be accurate, fair, and not misleading.
  2. Changes to the Structure of the Entity: Where there are material changes to the structure or operations of a regulated entity, including changes to its ownership, governance structure, technology architecture, or business model, the entity must obtain SEC’s prior approval before implementing such changes. In addition, any cybersecurity incident, data loss, or loss of assets must be reported to SEC within twenty-four hours of such occurrence.
  3. Dispute and Conflict of Interest Management: Entities engaged in the trading of digital assets must maintain a comprehensive framework for receiving, handling, and resolving customer complaints. They are also required to establish and maintain appropriate procedures for identifying, managing, and mitigating conflicts of interest arising in connection with their digital asset trading activities.
  4. System Access and Transaction Monitoring: SEC may require regulated entities to provide API-based access to their financial, operational, and transaction data for regulatory monitoring and supervisory purposes. The Proposed Rules further require entities to implement systems capable of monitoring and reporting transactions involving Nigerian residents. In respect of cross-border transactions, entities must implement systems that maintain designated transaction wallets for domestic and cross-border asset flows. Such systems must also ensure that all inflows into and outflows from Nigeria are traceable to identifiable users.

3. Disclosure Requirements for the Issuance of Digital Assets 

The Proposed Rules require the disclosure of all material information relating to a digital asset prior to its issuance. An issuing entity is required to prepare a white paper containing the issuers information, characteristics, offer structure of the digital asset, and other material information to enable prospective investors make informed investment decisions. The whitepaper must be filed with SEC, and the issuing entity must obtain a no-objection or approval from SEC before offering the digital asset to the public. 

The issuing entity and its officers will be responsible for any misrepresentation or omission of material information contained in the whitepaper. Where there is a material change to the information relating to the digital asset following SEC’s no-objection or approval, the issuing entity will be required to file a supplementary or amended whitepaper with SEC and suspend further issuance of the digital asset pending compliance with the applicable requirements. 

4. Issuance of the Digital Assets 

The Proposed Rules provide that, for an asset to be eligible for issuance, the rights and obligations attached to the asset must be clear, the structure of the asset must be transparent, and the risks must be adequately disclosed. 

Digital assets shall be categorized either as Asset-Referenced Tokens, Asset-Backed Tokens, or other digital assets, including cryptocurrencies and utility tokens. Assets that are anonymous, exhibit a fraudulent token structure, or constitute an unbacked stablecoin will be prohibited from issuance. The asset must also be offered through a Digital Asset Offering Platform approved by SEC. 

5. Registration Under the Proposed Rules 

An entity intending to register under the Proposed Rules must apply to first participate in SEC’s Accelerated Regulatory Incubation Programme (“ARIP”). Following an application under the ARIP, SEC may grant the applicant an Approval-in-Principle to commence operations subject to the conditions prescribed by SEC. The Approval-in-Principle will be valid for a period of two years, after which SEC may require the entity to apply for full registration. 

SEC may, in certain circumstances, permit an applicant to bypass the ARIP process. This may apply where the applicant is a registered capital market operator, a registered (“VASP”), or a subsidiary of a licensed financial institution. 

To qualify for registration under the Proposed Rules, an entity must, amongst  other requirements, be incorporated in Nigeria in accordance with the Companies and Allied Matters Act, 2020. Its Chief Executive Officer and other principal officers must be resident in Nigeria, and the entity must maintain a registered office address in Nigeria. The applicant must also satisfy other registration and regulatory requirements prescribed by SEC. 

Conclusion 

SEC’s objective under the Proposed Rules is to establish a comprehensive regulatory framework for the digital assets market in Nigeria. Notably, the framework extends beyond the regulation of intermediaries engaged in the trading of digital assets to also encompass digital asset issuers and other relevant participants in the digital asset’s ecosystem. 

If implemented, the Proposed Rules will have significant implications for foreign entities seeking to issue digital assets in the Nigerian market. Such entities may be required to comply with requirements relating to the incorporation of a domestic entity where the parent company is incorporated outside Nigeria, as well as requirements concerning the residency of principal officers in Nigeria.