US dollars

Forex trading in Nigeria is only possible when it comes to the pairs involving the national currency — USDNGN, JPYNGN, GBPNGN, EURNGN. Futures, options, binary options are related to trading derivatives. The activity of accepting the national currency and converting it into a trading pair also requires an additional licenсe. Therefore, Forex brokers in Nigeria or companies like Alpari Forex that trades in futures or options need a Licenсe from the Central Bank issued under the Foreign Exchange Management Act, 1999. A Certificate of Trading in the Stock Market (NSE) should be also obtained under the Securities Laws (Amendment) Act, 1995.

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Requirements to Comply With

Conditions for the company to obtain the document:

• to be registered in Nigeria;
• to comply with business standards (start operations after receiving a Trade Certificate, determine a certified counterparty, do not accept funds from investors, until they receive full permission from the Stocks Market);
• to identify all managers, beneficiaries, and those influencing decision making.

In the case of running a brokerage company, one of the employees must be certified by the Securities Market (Basic) Module or Compliance Officers (Brokers) Module and obtain the following certificates:

• Capital Market (Dealers) Module;
• Derivatives Market (Dealers) Module;
• National Institute of Securities Markets (NISM) Series I — Currency;
• Derivatives Certification Examination.

So if you want to find a reliable and trusted broker with good rates in Nigeria and safely deposit online, then you need to make sure that you are dealing with the specialist having all the required certificates.

Licence from the Central Bank of Nigeria

There are three categories of licensees for regulating the currency reserves of the Central Bank of Nigeria, which are allowed on the Interbank of Nigeria:

• Dealers Category I (AD) bank (national banks);
• Authorized Dealers Category-II (Regional and Municipal Banks);
• Full Fledged Money Changers.

What is more, a brokerage company is to undergo a 6-month mandatory external audit and provide monthly reports on transactions. To facilitate the procedure, it is recommended to obtain a franchise, where the franchisor is vouched for a new business person. The requirements for the company do not change. However, at the same time, it saves time for obtaining a licence from 18 months, according to the standard procedure, to 6 months if a franchise is used.

Forex trading 2

As Forex signals, the most common payment method is PayPal, Skrill, Neteller, which are supported by banks as an issuer of cards in Nigeria. Since 2013, the Central Bank of Nigeria has been pursuing a policy of the compulsory verification of card payments by banks of Visa and Mastercard issuers and the cancellation of payments that are contrary to the monetary legislation of Nigeria.

If the payment with the financial reserves is entitled as “Forex,” “CDF,” “Investment,” “Binary Options,” it should be cancelled by the Banks of Nigeria. If the beneficiary’s details are a Forex company, then the bank is obliged to suspend such a payment. In practice, funds transferred through the aforementioned payment systems cannot be fully verified.

The only problem is the refund of payments through payment systems from the Forex offshore since the latter are often not credited to the cards of African banks given the Central Bank check.

Conclusions

Doing Forex and binary options trading in Nigeria without the permission of the Central Bank is a criminal offence for both the Forex company and the customer. The time for issuing all the necessary documents is not determined since the regulator must make sure that the protective mechanisms of internal reserves and currency are observed.

Companies striving to legally provide Forex services in Nigeria receive a franchise under Full Fledged Money Changers and the NSE stock market as well as the MCX-SX licence for trading on the commodity exchange. Once this is done, they are allowed to carry out all trading operations on national markets in case they are using the national monetary unit of Nigeria. Of course, other currencies and commodities can be accepted as well. As you can see, a lot matters in this business. So, instead of working with a broker near you, it is better to find a company that complies with all industry rules.