NASS Grants SEC Power To Regulate Online Forex Platforms

The National Assembly has granted the Securities and Exchange Commission (SEC) broad regulatory powers over online forex trading platforms, their activities, and intermediaries.

This significant development follows the passage of the recently approved Investments and Securities Bill, which repeals the 2007 Act and reaffirms the SEC as the primary regulatory body for Nigeria’s capital market.

The bill, which originated in the Senate and was subsequently passed in the House of Representatives after its third reading recently, aims to modernise and strengthen the regulation of Nigeria’s capital market. Among its key objectives, the bill seeks to ensure fair and transparent market operations, safeguard investors, and reduce systemic risks.

Clause 3(3)(o) of the bill specifically grants SEC the authority to register and regulate online forex platforms, marking a critical move towards formalizing and overseeing forex trading activities in the country. Additionally, Clause 3(4)(c) provides SEC with the power to place directors of public companies on probation when necessary, ensuring accountability at the highest levels of corporate governance.

The bill also introduces provisions that allow SEC to impose substantial penalties for non-compliance. Securities exchanges that fail to adhere to SEC directives could face fines starting at ₦10 million, with further daily penalties for continued non-compliance. In addition to these financial penalties, the bill empowers SEC to revoke licenses and enforce other sanctions as part of its mandate to maintain a fair, efficient, and transparent market.

Further provisions of the bill include the use of collected fees for the development of the capital market, alongside initiatives to provide training and guidelines that will help strengthen the sector. These measures are aimed at enhancing market integrity and fostering investor confidence in Nigeria’s financial markets.

With the passage of this bill, the SEC is now better equipped to regulate emerging market sectors like online forex trading, ensuring that Nigeria’s capital market operates with greater oversight, fairness, and stability.