SEC Proposes N3bn Capital for Online Forex Brokers

The Securities and Exchange Commission (SEC) of Nigeria has introduced proposed regulations for online forex trading and contracts for difference (CFD). Under these proposals, an Online Forex Broker Dealer operating under the Market Maker/Principal Operator model is required to maintain a Minimum Paid-up Capital of N3 billion, unimpaired by losses.

Additionally, these entities must uphold a Minimum Liquid Capital of either N2.4 billion (80% of the capital) or 10% of total liabilities, whichever is higher. For those operating under the Straight-Through Processing (STP) Operator model or the Electronic Communication Network (ECN) model, a Minimum Paid-up Capital of N2 billion is mandated.

The SEC's rules will apply to all entities engaging in online forex trading services targeting Nigerian residents, including offshore entities that promote their services in Nigeria. The proposed regulations aim to enhance the integrity and security of the forex trading environment in Nigeria.