The Securities and Exchange Commission (SEC) has proposed new rules for online foreign exchange and contracts for difference (CFD) trading, with capital requirements ranging from N30 million to N5 billion and tighter oversight of both local and offshore operators targeting Nigerian investors.
Under the proposed Rules on Online Forex Trading and Contracts for Difference, operators offering online forex services to Nigerian residents will be required to register with SEC.
The framework covers forex brokers, introducing brokers, technology and platform providers, as well as offshore firms that market their services to Nigerians or allow residents to open trading accounts.
Market-making or principal-operator brokers will be required to maintain minimum paid-up capital of N3 billion, while brokers operating under the straight-through processing (STP) or electronic communication network (ECN) models will require N2 billion.
Technology and platform providers will face a N5 billion capital requirement, while individual and corporate introducing brokers will require N30 million and N150 million, respectively. The proposed rules also require brokers to maintain minimum liquid capital of N2.4 billion or 10 per cent of total liabilities, whichever is higher, for market-making operators.
