SEC Proposes New Rules for Online Forex Trading, Sets Capital Requirement

By Adedapo Adesanya

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 on Tuesday, September 1. It builds directly on the Investments and Securities Act (ISA) 2025, which President Bola Tinubu signed into law in March 2025.

It is also seeking to bring both domestic and offshore operators that target Nigerian residents into a formal licensing and supervisory framework, alongside a proposed 30 per cent minimum local ownership requirement for licensed brokers.

The draft framework creates three licence categories: Online Forex Broker/Broker Dealer, Introducing Broker, and Technology/Platform Provider with each category 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 per cent 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 per cent of total liabilities, whichever is higher.

Technology and platform providers would face the highest minimum capital requirement of any category, at N5 billion.

According to the new rules, 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 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, with at least two directors, including the Managing Director/Chief Executive Officer, required to be resident in Nigeria.

The regulator 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.

Also, 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.

Client funds would have to be held in segregated accounts at banks licensed by the Central Bank of Nigeria (CBN) and 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.

The rules will also see brokers restricted 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.