The Securities and Exchange Commission has taken steps to strengthen its oversight of online foreign exchange trading in Nigeria, broadening its proposed regulatory framework to capture both local operators and offshore entities targeting Nigerian residents.

In the rules released on Tuesday, the SEC stated: “The regulations would apply throughout Nigeria and cover all persons engaging in or offering online forex trading services to residents of Nigeria, irrespective of whether the platform or medium is incorporated in Nigeria or operates from outside the country.”

The Commission explained that the initiative is designed to bring operators serving Nigerian investors under a clearly defined regulatory structure, particularly given the increasingly cross-border nature of online forex trading platforms.

According to the rules, several categories of persons have been classified as “Regulated Entities”, including Introducing Brokers, online forex brokers and broker-dealers, as well as technology and platform providers.

Notably, the framework also extends to offshore entities that offer online forex CFD trading services to Nigerians.

The SEC stated: “An offshore entity will fall under the rules if it lists Nigeria as an accessible or supported country on its website, mobile application, trading platform or client onboarding portal.”

It further stated: “Offshore operators would also be covered where they permit people resident in Nigeria to open or maintain trading accounts.”

The Commission added: “The regulatory scope extends further to companies that advertise, market or promote their services to Nigerians through Nigerian influencers, affiliates, introducing brokers, training providers, seminars, webinars, social media pages or online campaigns.”

The SEC also identified the use of Nigerian-specific features as an indicator that an offshore operator is targeting the Nigerian market, including the use of the naira, Nigerian market references, Nigerian contact details or Nigeria-specific promotional materials in connection with the services offered.

In the same vein, offshore entities that maintain representatives, agents, affiliates, introducing brokers, training providers or customer-support channels within Nigeria would also fall under the regulatory framework.

The rules further stipulate that an offshore entity may be subject to regulation where it has clients resident in Nigeria or otherwise conducts business in a manner suggesting an intention to provide online forex CFD trading services to Nigerians.

Through this approach, the SEC is effectively seeking to close potential regulatory gaps that could emerge when online forex operators are based outside Nigeria but actively solicit and serve Nigerian investors.

The Commission also noted that any person who carries on, or purports to carry on, a regulated activity under the rules would fall within the scope of the framework.