The Securities and Exchange Commission (SEC) has proposed a new regulatory framework for online forex trading and Contracts for Difference (CFDs), setting minimum capital requirements of up to N5 billion for operators seeking to participate in Nigeria’s retail forex market.
The proposed rules, issued under the Investments and Securities Act (ISA) No. 2, 2025, are contained in the draft Rules on Online Forex Trading and Contracts for Difference published by the capital market regulator on Tuesday, September 1.
They seek to bring both domestic and offshore operators that target Nigerian residents into a formal licensing and supervisory framework, alongside a proposed 30% minimum local ownership requirement for licensed brokers.
In other words, the proposed rules are designed to apply not only to operators incorporated in Nigeria but also to offshore entities that target Nigerian residents.
What the draft framework is proposing:
The draft framework creates three licence categories — Online Forex Broker/Broker Dealer, Introducing Broker, and Technology/Platform Provider — each with its own capital threshold.
- B-Book or market-making forex brokers would require a minimum paid-up capital of N3 billion, alongside minimum liquid capital of N2.4 billion or 10% of total liabilities, whichever is higher.
- Straight-Through-Processing (STP) and Electronic Communication Network (ECN) brokers or A-Book brokers would require N2 billion in paid-up capital, with minimum liquid capital of N1.6 billion or 10% of total liabilities, whichever is higher.
- Technology and platform providers would face the highest minimum capital requirement of any category, at N5 billion.
- Corporate Introducing Brokers would require N150 million, while individual Introducing Brokers would require N30 million.
- Registration fees have also been proposed, ranging from N1 million for individual Introducing Brokers to N30 million for Technology/Platform Providers, on top of a N100,000 application fee and a N300,000 processing fee.
The proposed rules also introduce a minimum Nigerian ownership requirement for licensed entities.
Under the draft framework, at least 30% of a broker’s issued and paid-up share capital would have to be held directly and continuously by Nigerian citizens who serve as directors of the company, with at least two directors — including the Managing Director/Chief Executive Officer — required to be resident in Nigeria.
The Commission has stipulated that this ownership cannot be routed through nominees, trusts or other arrangements designed to circumvent the requirement, meaning offshore brokers may not be able to satisfy the rule by simply setting up a Nigerian subsidiary.
A key feature of the proposed framework is its explicit reach into offshore platforms serving Nigerian residents. A foreign broker could fall within the SEC’s regulatory perimeter where it lists Nigeria as a supported country, allows Nigerians to open trading accounts, markets to Nigerian residents using local affiliates or influencers, or maintains representatives or customer-support channels in the country.
Other provisions
The draft rules carry several other provisions aimed at tightening the retail forex market:
- Client funds would have to be held in segregated accounts at CBN-licensed banks, reconciled daily and retained for at least seven years.
- Retail leverage would be capped at 1:400 for major currency pairs, 1:300 for minor/exotic pairs and CFDs on indices and commodities, and 1:2 for cryptocurrencies — with professional clients able to access up to 1:1,000 subject to eligibility criteria.
- Retail clients would get negative-balance protection and a mandatory close-out of positions once equity falls to 50% or less of required margin.
- Brokers would be barred from offering, marketing or facilitating trading in currency pairs involving the Naira without prior SEC approval.
- Brokers would have to disclose monthly the percentage of retail accounts that lose money, and file all advertising and influencer promotions with the SEC for approval.
- Bonuses, trading contests, referral incentives and the PAMM (Percentage Allocation Management Model) would be prohibited, as would binary options for retail clients.
- Technology/platform providers would be required to maintain at least 99.5% platform uptime, use end-to-end encryption and multi-factor authentication, and report material cybersecurity incidents within 24 hours.
A Daily Price Spread Report would be required from every CFD broker by 10:00 a.m. WAT (West African Time) the next business day (T+1), and all regulated entities would jointly fund an Investor Protection Fund in line with the ISA 2025.
What you should know:
Existing and informal operators would be given three months to submit a complete registration application once the rules take effect, and six months to fully comply with registration requirements.
- Operators that fail to apply within the stipulated window would be required to cease regulated activities. These are proposed rules and not yet in force.
- This draft framework builds directly on the Investments and Securities Act (ISA) 2025, which President Bola Tinubu signed into law in March 2025.
- That Act already made it an offence for any entity to operate an online forex trading platform or digital asset exchange in Nigeria without SEC registration, giving the Commission the legal backing for the more detailed rules now being proposed.
- SEC has repeatedly warned Nigerians against unregistered forex and crypto platforms operating outside its regulatory framework, including a public notice in May 2026 flagging unregistered investment schemes promoted on WhatsApp, Instagram, TikTok and other social media platforms.
- The Commission has said Section 196(3) of the ISA 2025 criminalises the promotion and operation of unregistered investment schemes, with violations punishable by a fine of not less than N20 million or imprisonment.
SEC DG Emomotimi Agama had earlier stated plainly that any digital asset or forex trading platform that is not registered is illegal.
The proposed forex rules also arrive as the SEC pursues a broader push to deepen market participation.
- The Commission recently inaugurated a Capital Market Working Group on Market Liquidity, targeting up to 20 million new investors through technology-driven solutions, and has flagged plans to channel more of the “speculative energy” currently going into unregulated trading into licensed, regulated instruments.
The SEC would also retain powers to suspend or revoke a licence where an entity obtains registration through fraud, commits a serious regulatory breach, becomes insolvent, is convicted of a financial crime, or fails to pay regulatory fees — with an emergency suspension option available where there is a public-interest or systemic-risk concern.
