Safer Trading Environment as Nigerian Central Bank Upgrades Biometric Security Proceedings

Africa's most populous nation’s central banking authority, the Central Bank of Nigeria, has introduced new security measures that aim to revolutionize the country's position as a reliable, credible and regulated economy.

'All Africa' has reported that the Central Bank of Nigeria has implemented new biometric technology measures in a bid to add sophisticated systems that will bring the nation's banking and financial system in line with global standards. The new approach could bolster the growing FX trading environment as brokers operating from well-regulated jurisdictions such as the UK will find it easier to onboard Nigerian traders.

Nigeria, one of Africa's giant economies, has gradually been developing its financial and banking system as global trade and international commerce play a vital role in the development of the country. Regulators use international standards such as the Financial Action Task Force (FATF) when dealing with individuals from foreign states. Although the new measures are far from those in the EU or North America, the current initiative highlights Nigeria's commitment to improving its position in the global economy.

Under the new regime users will undergo a registration process where their fingerprints and facial features will be added to a central database.

FX traders from Nigeria dealing with UK regulated brokers, authorized under the Financial Conduct Authority (FCA), are required to send a range of documents that have been notarized by people with authority e.g a lawyer or public notary to the broker. The number of documents range from three to four which include, a passport, bank statement and utility bills.

Basil Omeje, organizer of the recent FX exhibition in Lagos, explained to Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Magnates: “Nigerian traders are young and hungry, however the developed brokers are unable to provide them support due to the difficulties in setting up accounts.”

FATF is a Paris-based intergovernmental body established in 1989 by the Ministers of its Member jurisdictions. The objectives of FATF according to the firms website: "Are to set standards and promote effective implementation of legal, regulatory and operational measures for combating Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term, terrorist financing and other related threats to the integrity of the international financial system." FX brokers use FATF as a benchmark when designing new account procedures.

FX in Nigeria

Nigerian investors were first exposed to the FX markets in the mid 2000's. The rise in the use of the internet accompanied by the sharp rise in disposable income among Nigerian residents meant investors were exploring new opportunities in the market. Unfortunately for Nigeria, due to its international standing in relation to money laundering, several international brokers closed their doors, Russian-based FX brokers took heed of the opportunities in Nigeria and firms such as InstaForex, LiteForex and EXNESS are prominent players with local representative offices.

Sunil Sawlani, a Dubai-based portfolio manager of Nigerian origin, commented about the Nigerian market to Forex Magnates: “Nigeria is sure to be one of the fastest growing markets for FX and CFD trading over the next 18 months, the growing affluent population is open to new investment opportunities.”

Nigerian equity markets were one of the best performing in 2013, the main benchmark index, the NSE All-Share Index jumped 47% in 2013, this was driven by strong earnings among leading blue chip companies, some of the firms leading the chase include; Glaxosmithkline Plc, Zenith Bank Plc, FBN Holdings Plc, Learn Africa and Dangote Cement Plc. In addition, a stable naira brought in portfolio investments backed up by regulatory reforms. Africa’s largest oil producing nation saw a spike in the performance of its oil and gas index, climbing 122.26% in 2013.