SEC Moves To Regulate Online Forex Trading, Targets Offshore Platforms

The Securities and Exchange Commission (SEC) has proposed new rules to regulate online forex Contract for Difference (CFD) trading in Nigeria, including services offered by offshore platforms targeting Nigerian residents.

Under the proposed rules, the regulations would apply nationwide to all persons offering online forex trading services to residents of Nigeria, whether operating through platforms incorporated in Nigeria or from outside the country.

The SEC listed Introducing Brokers, online forex brokers and broker-dealers, and technology and platform providers among the entities that would be subject to the rules.

Offshore forex platforms would also fall under the proposed framework if they target Nigerian residents through their websites, mobile applications, trading platforms or client onboarding portals.

The SEC said an offshore entity would be considered within the scope of the rules if it allows Nigerians to open or maintain trading accounts, advertises its services to Nigerian residents or uses Nigerian influencers, affiliates, introducing brokers, training providers, seminars, webinars or social media campaigns to attract customers.

The proposed rules would also cover offshore operators using the naira, Nigerian market references, Nigerian contact details or Nigeria-specific promotional materials in connection with their services.

Platforms with representatives, agents, affiliates, introducing brokers, training providers or customer-support channels in Nigeria would similarly be covered.

The SEC further proposed that offshore entities with Nigerian-resident clients, or those conducting business in a manner indicating an intention to provide online forex CFD trading services to Nigerians, would fall within the regulatory framework.

The proposed rules also seek to cover any person who carries on, or purports to carry on, activities regulated under the framework.

The move signals a broader attempt by the Nigerian capital market regulator to bring online forex CFD activities and offshore operators targeting Nigerian investors within a defined regulatory framework.