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.
The Commission said in a draft framework released on Tuesday that 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.
According to the SEC, entities covered include Introducing Brokers, online forex brokers and broker-dealers, and technology and platform providers.
The proposed rules also seek to bring offshore forex platforms under regulation if they target Nigerian residents through websites, mobile applications, trading platforms or client onboarding portals.
The SEC stated that an offshore entity would fall 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 framework would also cover offshore operators using the naira, Nigerian market references, Nigerian contact details or Nigeria-specific promotional materials in connection with their services.
In addition, platforms with representatives, agents, affiliates, introducing brokers, training providers or customer-support channels in Nigeria would 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 Commission said the rules would also apply to 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.
