Nigeria’s financial regulator has proposed a sweeping new framework for retail foreign exchange trading that could require platform providers to hold up to ₦5bn ($3.3m; £2.5m) in minimum capital.
The draft guidelines, published on Tuesday by the Securities and Exchange Commission (SEC), aim to bring domestic and foreign online forex brokers targeting Nigerian residents under strict local oversight.
Under the proposed rules, offshore trading platforms operating in Nigeria would also be forced to hand over at least 30% direct ownership to local citizens serving as company directors.
Stricter capital and local ownership rules
The SEC’s draft framework establishes three distinct licensing tiers based on market risk and operational scale:
- Technology & Platform Providers: Must maintain a minimum paid-up capital of ₦5bn.
- B-Book (Market-Making) Brokers: Required to hold at least ₦3bn in capital.
- A-Book (Straight-Through Processing) Brokers: Subject to a ₦2bn capital requirement.
- Corporate Introducing Brokers: Required to hold ₦150m.
To prevent foreign brokers from operating through shell subsidiaries, the regulator stipulated that the 30% local equity requirement cannot be held through trusts or nominees.
Furthermore, at least two directors—including the chief executive officer—must be resident in Nigeria.
Overseas brokers targeted
The SEC made clear that the rules will apply to foreign platforms if they list Nigeria as a supported jurisdiction, allow residents to open accounts, employ local influencers, or provide dedicated customer support in the country.
The draft regulations also introduce consumer protection measures, including a ban on trading bonuses, referral incentives, and binary options. Leverage for retail clients will be capped at 1:400 for major currency pairs and 1:2 for cryptocurrencies.
Brokers will also be required to hold client funds in segregated accounts with licensed commercial banks and publish monthly disclosures showing the percentage of retail accounts that lose money.
Existing operators will have three months from the enactment of the rules to submit registration applications or face mandatory closure.
The proposal follows the enactment of the Investments and Securities Act 2025, which made operating an unregistered forex or digital asset platform in Nigeria a criminal offence punishable by heavy fines or imprisonment.
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