NGX Regulation Limited (NGX RegCo) has introduced stricter compliance requirements for online trading platforms operated by Trading Licence Holders (TLHs), warning that firms deploying digital trading systems without prior regulatory approval may face sanctions.

The directive was issued in a circular signed by the Head of the Market Regulation Department, Chinedu Akamaka, and circulated to all Trading Licence Holders. It is aimed at strengthening investor protection, improving cybersecurity standards, and enhancing overall market integrity within Nigeria’s capital market.

According to the circular, all brokers operating or intending to launch web-based or mobile trading platforms must obtain prior written approval from NGX RegCo before deploying, migrating, or introducing any digital trading infrastructure.

“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,” the circular stated.

The regulator also introduced enhanced cybersecurity and operational requirements for all market operators, particularly those using digital platforms to execute trades and manage investor accounts.

NGX RegCo directed firms to strengthen their risk management and information security systems to protect trading activities and investor data from cyber threats and operational breaches.

“Trading firms must implement enhanced cybersecurity measures including Two-Factor Authentication (2FA), encryption systems, Secure Socket Layer (SSL), and HTTPS security protocols,” it stated.

The circular further mandated that penetration testing must be conducted at least twice annually through cybersecurity providers recognised by NGX RegCo, with certified reports submitted within stipulated timelines.

“Penetration testing must be conducted at least twice yearly through NGX-recognised cybersecurity providers, with certified reports submitted within stipulated timelines,” the regulator added.

NGX RegCo warned that non-compliance with the new requirements may attract penalties, including a minimum fine of N250,000 as well as other disciplinary measures under Exchange rules.

“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,” it stated.

The regulator also directed trading firms to maintain continuous monitoring of trading systems and ensure immediate reporting of any system failures, anomalies, or security breaches to the Exchange.

In addition, brokers were instructed to comply strictly with Know Your Customer (KYC) requirements before activating any trading account on digital platforms.

NGX RegCo stated that customer records and transaction data must be retained for a minimum of six years in line with regulatory requirements and market standards.

It also mandated full disclosure of investment risks to retail and institutional investors using online trading platforms, as part of broader investor protection measures.

Firms were further required to comply with existing rules governing market communication, advertising, and public disclosures to ensure transparency and market discipline.

The regulator noted that the updated requirements are part of broader efforts to align Nigeria’s digital trading infrastructure with global best practices while strengthening confidence in the capital market.