The foreign exchange market is one of the lucrative and profitable business opportunities which anybody can venture into to turn things around for himself financially. The Forex market is an industry that is composed of the Forex traders, Forex broker, Forex trading platform, currency pairs, trading instruments which are overseen by regulatory bodies.
One of the regulatory bodies in the Nigeria finance sector is the Securities and Exchange Commission (SEC). The Nigerian Securities and Exchange Commission (SEC) is the official regulatory institution of the Nigerian capital market. The Securities and Exchange Commission (SEC) examines, scrutinizes and observes the activities of the Nigerian capital market and they have been able to ensure proper and orderly trade dealings, thereby protecting the capital and finance market against insider trading abuses.
The Securities and Exchange Commission (SEC) has issued a warning to potential investors, businessmen and entrepreneurs on the potential and unseen danger in retail online Forex trading. A lot of advertisements and awareness has been spotted and seen in various forms such as electronic, mass media, social media and newspapers wooing investors to participate and engage in leveraged online foreign exchange (Forex) trading.
However, the Securities and Exchange Commission (SEC) advised the general public to take note that online retail Forex trading is currently unregulated in Nigeria; and consequently, it may be subject to abuse. The Securities and Exchange Commission (SEC) of Nigeria has said that there is no structure for online retail Forex trading in Nigeria at the moment and that it is when a framework, platform or a structure has been designed, programmed, planned and developed by the SEC for the regulation of online retail Forex trading, if not, any Forex trader or investor which participates or engages himself into such investment activity will be doing it solely at his or her own risk.
A retail foreign exchange trading is seen as a small section of the larger proportion of the foreign exchange market where different individuals speculate on the exchange rate between different currencies of the world.
The retail foreign exchange trading has evolved, grown and developed into a stage that with the advent and invention of the internet, it has been able to create a dedicated electronic and online trading platform on the internet which enables individuals to gain access to the global currency markets. In the year, 2016, it was recorded that the retail Forex trading represented a percentage of 5.5% out of the entire foreign exchange market (this was valued at $282 billion in daily trading turnover).
So many global and international Forex brokers who are domiciled and located in foreign based countries operate in Nigeria through branch offices, affiliates and partnership programs, referral/introduced brokers and most of them are not actually licensed or even regulated by the Securities and Exchange Commission (SEC) or directly regulated by any other regulator here in Nigeria.
These Forex brokers offer and provide Forex brokerage services illegally without any consent or seeking permission from the authorities. This in turn prevents the legal regulators from tracking and keeping records of their activities.