SEC sets N5bn entry price for forex platforms, N3bn for brokers

Nigeria’s Securities and Exchange Commission (SEC) is proposing a multibillion-naira capital barrier for operators in the country’s online forex and Contracts for Difference (CFD) market, with technology and trading platforms required to have up to N5 billion in paid-up capital and market-making forex brokers N3 billion.

The proposed framework, contained in the draft Rules on Online Forex Trading and Contracts for Difference published on Tuesday, September 1, 2026, represents a major tightening of oversight of Nigeria’s rapidly expanding retail forex market and would bring both local and offshore operators targeting Nigerian investors within the SEC’s regulatory perimeter.

Under the proposed rules issued pursuant to the Investments and Securities Act (ISA) 2025, B-Book or market-making forex brokers would require minimum paid-up capital of N3 billion, in addition to liquid capital of N2.4 billion or 10 per cent of total liabilities, whichever is higher.

STP and ECN, or A-Book, brokers would require N2 billion in paid-up capital and liquid capital of N1.6 billion or 10 per cent of liabilities, whichever is higher, while technology and platform providers would face the highest threshold at N5 billion.

Corporate Introducing Brokers would require N150 million, while individuals seeking such a licence would need N30 million.

The SEC is also proposing registration charges ranging from N1 million for individual Introducing Brokers to N30 million for technology and platform providers, in addition to a N100,000 application fee and N300,000 processing fee.

Beyond the financial requirements, the regulator is seeking to change the ownership structure of licensed forex businesses, with at least 30 per cent of a broker’s issued and paid-up share capital required 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 also have to be resident in Nigeria.

The proposed local ownership cannot be achieved through nominees, trusts or other arrangements designed to circumvent the requirement, potentially limiting the ability of offshore brokers to gain access to Nigeria simply by incorporating local subsidiaries.

The SEC is explicitly extending its proposed regulatory reach to foreign operators that target Nigerian residents. An offshore broker could fall within the rules where it lists Nigeria as a supported jurisdiction, permits Nigerians to open accounts, markets its services locally through affiliates or influencers, or maintains representatives or customer-support channels in the country.

The draft framework also proposes significantly tighter controls on retail trading and customer funds.

Client money would have to be held in segregated accounts with 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 and exotic pairs and CFDs on indices and commodities, while cryptocurrency leverage would be restricted to 1:2.

Professional clients could access leverage of up to 1:1,000, subject to eligibility requirements.

Retail investors would also receive negative-balance protection, while brokers would be required to close positions once equity falls to 50 per cent or below the required margin level.

Brokers would be prohibited from offering, marketing or facilitating trading in naira-related currency pairs without prior SEC approval.

The Commission is further proposing mandatory monthly disclosure of the percentage of retail accounts that lose money. Advertising and influencer campaigns would have to be submitted to the SEC for approval, while bonuses, trading competitions, referral incentives and PAMM arrangements would be prohibited for retail clients.

Binary options would also be prohibited.

Technology providers face separate operational and cybersecurity requirements, including a minimum 99.5 per cent platform uptime, end-to-end encryption, multi-factor authentication and mandatory reporting of material cybersecurity incidents to the SEC within 24 hours.

CFD brokers would also be required to submit a Daily Price Spread Report by 10:00 a.m. WAT on the next business day, while all regulated entities would contribute to an Investor Protection Fund under the ISA 2025.

Existing and informal operators would have three months from the effective date of the rules to submit complete registration applications and six months to achieve full compliance. Operators that fail to apply within the stipulated window would be required to cease regulated activities.

The proposed rules are not yet in force.

They build on the ISA 2025, signed into law by President Bola Tinubu in March 2025, which already made it an offence for entities to operate online forex trading platforms or digital-asset exchanges in Nigeria without SEC registration.

The SEC has repeatedly warned Nigerians against unregistered forex, cryptocurrency and investment schemes promoted through social media platforms. In May 2026, the Commission flagged unregistered investment schemes promoted through WhatsApp, Instagram, TikTok and other digital channels, stressing that operators outside its regulatory framework are acting illegally.

The regulator’s latest move comes as it seeks to deepen participation in the formal capital market and redirect some of the speculative activity taking place in unregulated online trading towards licensed investment products.

The SEC recently inaugurated a Capital Market Working Group on Market Liquidity, with a target of attracting up to 20 million new investors through technology-driven solutions, while also highlighting the need to bring Nigeria’s speculative investment appetite within a more regulated framework.

The Commission would retain powers to suspend or revoke licences where an operator obtains registration through fraud, commits a serious regulatory breach, becomes insolvent, is convicted of financial crimes or fails to meet regulatory obligations. It would also have emergency suspension powers where continued operations present a public-interest or systemic-risk concern.

The proposed framework could significantly reshape Nigeria’s online forex industry by raising the financial threshold for entry, imposing local ownership requirements and placing greater responsibility on platforms for investor protection, disclosure and cybersecurity.