NGX tightens compliance for online trading platforms
NGX Regulation Limited (NGX RegCo) has tightened compliance requirements for online trading platforms, warning that Trading Licence Holders (TLHs) deploying digital trading systems without prior regulatory approval could attract sanctions.
The directive was contained in a recent circular signed by the Head of the Market Regulation Department, Chinedu Akamaka, and issued to all Trading Licence Holders, highlighting regulatory moves to strengthen investor protection, cybersecurity standards, and market integrity across Nigeria’s capital market.
The revised compliance reminder mandates all brokers operating or planning to launch web-based or mobile trading platforms to obtain written approval from NGX RegCo before deployment, migration, or introduction of any new digital trading infrastructure.
The regulator also outlined stricter operational and cybersecurity obligations expected from market operators.
NGX RegCo stated that brokers must strengthen their risk management and information security frameworks to safeguard trading activities and investor data. The regulator added that firms would be expected to comply fully with prescribed cybersecurity standards and operational monitoring requirements.
“All Trading License Holders operating online trading platforms are required to obtain prior written approval from NGX RegCo before deployment or migration to any digital trading system.”
“Trading firms must implement enhanced cybersecurity measures including Two-Factor Authentication (2FA), encryption systems, Secure Socket Layer (SSL), and HTTPS security protocols.”
“Penetration testing must be conducted at least twice yearly through NGX-recognised cybersecurity providers, with certified reports submitted within stipulated timelines.”
“Failure to comply with the provisions of the circular may attract sanctions including a minimum penalty of N250,000 and other disciplinary actions under Exchange rules.”
The regulator further directed trading firms to maintain continuous monitoring of trading activities and promptly report system failures, anomalies, or operational breaches to the Exchange.
NGX RegCo also stressed strict compliance with Know Your Customer (KYC) requirements before account activation, with brokers mandated to retain customer records for at least six years.
In addition, trading platforms are expected to provide adequate disclosures on investment risks while complying with existing advertising, communication, and publication rules.
Brokers are required to ensure full compliance with KYC procedures before onboarding investors onto digital trading platforms.
Customer records and transaction documentation must be retained for a minimum of six years in line with regulatory standards.
Online trading platforms must provide clear disclosures on investment risks to protect retail investors.
Firms are expected to comply with all existing rules guiding market communication, advertisements, and publications.
