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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.

NIGERIA’S FINANCIAL MARKETS REFORM – THE VIRTUAL ASSETS COORDINATION EXECUTIVE ORDER 2026 AND SEC’S PROPOSED CROSS-BORDER TRADING RULES

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BY SEUN TIMI-KOLEOLU & ENIOLA SOGBESAN

Introduction

Nigeria continues to take significant steps towards modernizing its financial markets by creating a more transparent, innovative and globally competitive investment ecosystem. Two recent developments reflect this direction: the Presidential Executive Order on Virtual Assets Coordination 2026 (the “Executive Order”) and the Securities and Exchange Commission’s (SEC) Proposed Rules on Cross-Border Securities Trading and Custody (the “Proposed Rules”). Although they address different segments of the financial market, both initiatives are aimed at strengthening Nigeria’s regulatory framework, inter-agency coordination, and supporting responsible innovation.

In this newsletter, we examine the key highlights of these developments and their implications for investors, capital market operators, fintech companies and other stakeholders. We also consider how these reforms fit into Nigeria’s broader efforts to align its financial/capital markets with international best practices while encouraging growth, protecting investors and enhancing regulatory coordination.

  1. The Presidential Executive Order on Virtual Assets Coordination 2026
    President Bola Ahmed Tinubu on July 17, 2026 signed the Presidential Executive Order on Virtual Assets Coordination, 2026 (the “Executive Order”). The Order which takes effect immediately, is a response to a largely fragmented regulatory landscape that has exposed Nigerians to unchecked losses from unregulated operators. The Executive Order aims to protect investors while promoting responsible innovation and preserving financial system integrity.Key Highlights of the Executive OrderIt is important to note that the Executive Order does not establish a new regulator but rather establishes a mechanism for coordination amongst existing regulators such as SEC, Central Bank of Nigeria (CBN), Nigeria Revenue Service (NRS), Nigerian Financial Intelligence Unit (NFIU) and Office of the National Security Adviser (ONSA). The key highlights of the Executive Order include-
  • the establishment of a Virtual Asset Council (the “Council”) chaired by the CBN Governor, with the Director-General of the SEC and the Chairman of the Nigeria Revenue Service serving as Vice-Chairs;
  • the establishment of a Virtual Asset Office (VAO) to serve as the operational arm and secretariat of the Council;
  • a functional allocation of regulatory responsibilities among regulators –
      1. SEC – regulation of virtual assets that constitute securities and investment products;
      2. CBN – supervision of payment, settlement, custody and other non-security virtual asset activities within its statutory mandate;
      3. NRS – issue a specialized tax policy for the taxation of virtual assets;
      4. NFIU – oversight for AML/CFT compliance
      5. ONSA – coordination of national security and intelligence.
  • the establishment of a dedicated CBN regulatory sandbox for virtual asset and blockchain-based innovation.Implications and Opportunities for Virtual Asset Service ProvidersThe Executive Order signals a more coordinated regulatory framework for virtual assets, with clearer allocation of responsibilities among regulators and stricter oversight of anti-money laundering and counter-terrorism financing (AML/CFT) standards. Virtual Asset Service Providers (VASPs) should also monitor opportunities to participate in the CBN’s proposed regulatory sandbox, as well as anticipated tax guidance from the Nigeria Revenue Service (NRS). Collectively, these developments are expected to provide greater regulatory certainty for compliant operators while potentially increasing enforcement against operators that do not meet the applicable regulatory requirements.

    As of the date of this newsletter, we note that the official text of the Executive Order has not been publicly released, and we expect it to be released shortly. Once published, a detailed review of its provisions will be necessary to assess its implications for VASP’s and other participants in Nigeria’s digital asset ecosystem.

B. Proposed Rules On Cross-Border Securities Trading and Custody
The Securities and Exchange Commission (SEC) on July 2, 2026 published a draft of its “Proposed Rules on Cross-Border Securities Trading and Custody” (the “Proposed Rules”). The Proposed Rules represent a significant step by the SEC towards establishing a comprehensive regulatory framework for Nigerian investors’ wishing to invest in foreign securities. The Proposed Rules seek to regulate the provision of cross-border securities trading services by SEC-registered brokers, while strengthening investor protection, enhancing regulatory oversight, and promoting the integrity of cross-border investment activities.

  1. Scope/Applicability
    The Proposed Rules are applicable to every broker licensed by the SEC that provides Nigerian investors access to foreign securities listed or traded on a foreign securities exchange. More specifically, the Proposed Rules applies to the following services –
    1. trading in foreign securities on behalf of Nigerian investors;
    2. execution of cross-border securities transactions through foreign intermediaries;
    3. custody and safekeeping of foreign securities belonging to Nigerian investors;
    4. maintenance of records of beneficial ownership of foreign securities; and
    5. the protection of investor rights and assets within indirect holding structures.
  1. Licensing Requirements
    Under the Proposed Rules, a broker is prohibited from providing cross-border securities trading services without first obtaining a prior “No Objection” from the SEC.To obtain a No Objection from the SEC, a broker must submit an application which include but not limited to the following documents –
    1. detailed description of the proposed cross-border trading services;
    2. identification of foreign exchanges to which access shall be provided;
    3. details of foreign brokers and custodians to be engaged;
    4. description of custody and settlement arrangements; and
    5. policies governing safeguarding of client assets.

The Proposed Rules clearly prohibit a broker from facilitating foreign securities trading, unless it maintains a minimum net liquid capital of not less than ₦2 billion.

  1. Approval Requirements for Foreign Brokers?
    Prior to engaging in foreign securities transaction through a foreign broker, a Nigerian broker shall ensure that the foreign broker satisfies the following conditions –
    1. the foreign broker must be licensed and supervised by a securities regulator;
    2. it must operate within jurisdictions that are members of the International Organization of Securities Commissions (IOSCO) and whose regulator is a signatory to the IOSCO Multilateral Memorandum of Understanding or any other cooperation arrangement with the SEC;
    3. it must maintain adequate financial resources, operational capacity, custody safeguards, and client asset protection mechanisms;
    4. where applicable, it is a participant in recognized clearing and settlement systems; and
    5. the foreign broker is not subject to any material regulatory sanction, restrictions, suspension, or enforcement action that may impair its operations or expose investors to undue risk.
  1. Regulatory Assessment and Recognition of Foreign Brokers
    Under the Proposed Rules, a broker shall not enter any arrangement or any other business relationship with a foreign broker for the purpose of providing cross-border securities trading without the prior approval or a “No Objection” of the SEC.An application for approval to engage a foreign broker shall be accompanied by the following:
    1. the proposed agreement between the foreign and Nigerian broker;
    2. details of the services to be provided by the foreign broker;
    3. details of custody, clearing, settlement, and operational arrangements;
    4. evidence of the foreign broker’s licensing and regulatory authorization status;
    5. a status report, letter of good standing, or fit and proper confirmation issued by the foreign broker’s regulator and
    6. such other information as the SEC may require.
  1. Investor Protection
    The Proposed Rules require every foreign security purchased on behalf of a Nigerian investor to be held by a regulated foreign custodian or clearing participant. Also, all securities purchased by an investor must be segregated from the assets of the broker or custodian.Under the Proposed Rules, every broker is required to ensure that –
    1. proper books and records are maintained to clearly distinguish the assets of each investor from the assets of the broker;
    2. no investor asset is utilized for the benefit of the broker or any other investor without the prior written authorization of the affected investor client and the approval of the SEC, where applicable; and
    3. adequate systems and controls are established to ensure the continuous protection, reconciliation, and traceability of client assets.
  1. What are the reporting obligations of Brokers under the Proposed Rules?The Proposed Rules require a broker to submit quarterly reports to the SEC. The details of the report shall include the following –

      1. aggregate value of foreign securities held by Nigerian investors;
      2. custody locations of such securities; and
      3. reconciliation statements.
  2. Fees and Sanctions.The SEC shall be entitled to a fee 0.35% on the purchase of every foreign security by a Nigerian investor and this fee may be reviewed by the SEC from time to time. Upon collecting the fee, the Broker shall submit monthly transaction returns and fee remittance reports to the SEC in the form and manner prescribed by the SEC including reconciliations of transactions executed through foreign intermediaries.Where a broker fails to comply with the Proposed Rules, such broker shall be subject to sanctions such as suspension, monetary penalties, revocation of registration and any other sanction that the SEC may impose.

    Conclusion

    The Virtual Assets Coordination Executive Order 2026 and SEC’s Proposed Rules on Cross-Border Trading of Foreign Securities and Custody, represent important milestones in Nigeria’s efforts to strengthen the regulatory architecture of its financial markets. While the Proposed Rules is still in its draft form, it seeks to provide a structured framework for access to foreign securities, and the Executive Order enhances regulatory coordination for virtual assets. Together, these developments reflect a broader policy objective of positioning Nigeria’s financial markets to support innovation while aligning with international regulatory standards.

NIGERIA CAPITAL MARKET REGULATORY UPDATE: SEC MANDATES REGISTRATION OF COLLATERAL MANAGEMENT COMPANIES, WAREHOUSE OPERATORS AND WAREHOUSES

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BY ADERONKE ALEX-ADEDIPE & OMODELE FATODU

On 11 May 2026, the Securities and Exchange Commission (the “Commission”) issued a circular clarifying the registration requirements applicable to certain capital market operators.

The Circular applies to entities involved in the storage, management and facilitation of commodities used in structured trade financing or warehouse receipt arrangements. In particular:

  • Collateral Management Companies (“CMCs”);
  • Warehouse Operators; and
  • Warehouses linked to commodity exchanges or electronic warehouse receipt systems.

Although these categories of operators were already recognised and regulated under the SEC Rules on Commodity Exchanges and Trading Platforms; Warehouse Receipt Systems; and Collateral Management and Warehousing Operations, the Circular appears intended to reinforce compliance with the existing registration regime and clarify that entities operating under informal, transitional or unregistered arrangements are not exempt from regulatory requirements.

The Commission notes that entities currently carrying on any of the relevant activities under such informal or transitional arrangements are also required to apply for registration. Accordingly, the Commission has directed all existing and prospective entities within the scope of the Circular to submit complete registration applications within 90 days from the date of the Circular (the “Registration Deadline”).

The SEC further clarified that compliance will only be recognised upon submission of a complete application within the Registration Deadline. Consequently, incomplete applications, or failure to respond to requests for additional information within the stipulated timelines, will not satisfy the registration requirement.

In view of this Circular, we have set out below a brief overview of the registration and minimum capital requirements applicable to CMCs and Warehouse Operators:

S/N Capital Market Operator Registration Documents Minimum Capital
1. Collateral Management Companies
  • Duly completed SEC Forms 2, 2D and 3
  • Minimum of three sponsored individuals, including a Managing Director and Compliance Officer;
  • Certificate of Incorporation, Memorandum and Articles of Association, and CAC Status Report;
  • Company profile, organisational structure and details of principal officers;
  • Evidence of payment for shares allotted to shareholders;
  • Evidence of financial and technical capacity to carry out collateral management functions;
  • Latest audited accounts or statement of affairs; and
  • Valid fidelity insurance bond covering at least 20% of the minimum paid-up capital.
 Tier 1 (Local/Regional Operators) – ₦200,000,000

Tier 2 (National/International Reach) – ₦500,000,000

 
2. Warehouse Operators
  • Duly completed SEC Forms 2, 2D and 3;
  • Minimum of three sponsored individuals, including a Managing Director and Compliance Officer;
  • Certificate of Incorporation, Memorandum and Articles of Association, and CAC Status Report;
  • Evidence of adequate storage facilities and appropriate security arrangements;
  • Evidence of requisite weighing and quality control equipment;
  • Evidence of comprehensive insurance coverage for facilities, equipment and commodities;
  • Evidence of suitable operational infrastructure, including loading and unloading systems;
  • Standard Operating Procedures (SOPs) for warehousing operations;
  • Latest audited accounts or statement of affairs; and
  • Valid fidelity insurance bond covering at least 20% of the applicable minimum capital requirement.
 ₦500,000,000

 

Conclusion

The Circular reflects the Commission’s intention to strengthen regulatory oversight, transparency and accountability within the commodities trading and warehouse receipt ecosystem. By requiring all relevant operators to formally register, the Commission is likely seeking to ensure that only entities with adequate operational capacity, governance structures and financial standing participate in the market and remain subject to direct regulatory supervision.

Accordingly, entities operating within this sector should assess whether their activities fall within the scope of the Circular and take immediate steps to commence or regularise their registration with the Commission where applicable.