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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 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.

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.