The Securities and Exchange Commission has proposed a new regulatory framework for online forex trading and Contracts for Difference, setting minimum capital requirements of up to N5 billion for operators seeking to participate in Nigeria’s retail forex market.
The draft Rules on Online Forex Trading and Contracts for Difference, issued under the Investments and Securities Act No. 2 of 2025, were published by the capital market regulator on Tuesday, 1 September. The framework aims to bring both domestic and offshore operators that target Nigerian residents into a formal licensing and supervisory regime, and includes a proposed 30 per cent minimum local ownership requirement for licensed brokers.
Three Licence Categories and Capital Thresholds
The draft creates three main licence categories Online Forex Broker/Broker Dealer, Introducing Broker, and Technology/Platform Provider each with its own capital standard.
B-Book or market-making forex brokers would need a minimum paid-up capital of N3 billion, together with liquid capital of at least N2.4 billion or 10 per cent of total liabilities, whichever is higher. Straight-Through-Processing and Electronic Communication Network (A-Book) brokers would require N2 billion in paid-up capital and minimum liquid capital of N1.6 billion or 10 per cent of total liabilities, whichever is higher.
Technology and platform providers face the highest capital hurdle at N5 billion. Corporate Introducing Brokers would need N150 million, while individual Introducing Brokers would need N30 million.
Registration fees are also proposed, ranging from N1 million for individual Introducing Brokers to N30 million for Technology/Platform Providers, in addition to a N100,000 application fee and a N300,000 processing fee.
Local Ownership and Offshore Reach
Under the draft, at least 30 per cent 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. At least two directors, including the Managing Director or Chief Executive Officer, would be required to reside in Nigeria.
The Commission has stipulated that this ownership cannot be channelled through nominees, trusts or other arrangements designed to circumvent the rule. As a result, offshore brokers may not be able to satisfy the requirement merely by establishing a Nigerian subsidiary.
The proposed framework also extends explicitly to offshore platforms serving Nigerian residents. A foreign broker could fall within the SEC’s regulatory perimeter if it lists Nigeria as a supported country, allows Nigerians to open trading accounts, markets to Nigerian residents through local affiliates or influencers, or maintains representatives or customer-support channels in the country.
Client Protection and Conduct Rules
The draft includes several additional safeguards for the retail forex market. Client funds would have to be held in segregated accounts at banks licensed by the Central Bank of Nigeria, 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 and exotic pairs as well as CFDs on indices and commodities, and 1:2 for cryptocurrencies. Professional clients could access up to 1:1,000 subject to eligibility criteria. Retail clients would receive negative-balance protection and a mandatory close-out of positions once equity falls to 50 per cent or less of required margin.
Brokers would be prohibited from offering, marketing or facilitating trading in currency pairs involving the naira without prior SEC approval. They would also have to disclose monthly the percentage of retail accounts that lose money and file all advertising and influencer promotions with the Commission for approval.
Bonuses, trading contests, referral incentives and the Percentage Allocation Management Model would be banned, as would binary options for retail clients. Technology and platform providers would be required to maintain at least 99.5 per cent platform uptime, use end-to-end encryption and multi-factor authentication, and report material cybersecurity incidents within 24 hours.
Every CFD broker would have to submit a Daily Price Spread Report by 10:00 a.m. West African Time on the next business day. All regulated entities would jointly fund an Investor Protection Fund in line with the Investments and Securities Act 2025.
Transition Period
Existing and informal operators would be given three months to submit a complete registration application once the rules take effect, and six months to achieve full compliance with the registration requirements.
