Best CBN Regulated Forex Brokers in Nigeria

Tickmill is regulated by multiple top-tier regulatory authorities and allows trading on a wide range of currency pairs. It holds the regulatory license from FCA (717270), FSCA (49464), and CySEC (278/15). This makes it considerably safe for traders in Nigeria.

The spreads with the commission-free account type at Tickmill are slightly high but the trading cost is fairly low with the commission-based Pro and VIP accounts. With the Classic account, the average spread for EUR/USD is 1.8 pips and 21 pips for CFD on gold. The spread with the Pro account is 0 with 4$ commission on a round trade of a standard lot.

Tickmill requires clients to make an initial deposit of 100$ to start trading. This is higher than many of the regulated forex brokers in Nigeria. Naira is not available as the base currency of the account.

62 currency pairs and 19 CFDs can be traded with a maximum leverage of 1:500 at Tickmill. The customer support service is decent as there is no local phone number available for customer support in Nigeria.

A complete suite of MetaTrader 4 and MetaTrader 5 is available. We also found the research and educational tools at Tickmill to be much helpful in enhancing trading strategies.

Tickmill is ideal for those who seek low-cost commission-based forex trading with a well-regulated broker.

How to Choose a Regulated Forex Broker?

Each forex trader must know which broker is best suited for oneself. The suitability of a trader with the broker can differ due to multiple reasons. We have highlighted some of the factors that must be considered while choosing a forex and CFD broker in Nigeria.

1. Safety

   You don’t want to be cheated and conned by the fake brokers in the market. For a safe and sound trading experience, one must always choose a broker that is regulated by tier 1 or tier 2 regulatory authorities like FCA, FSCA, ASIC, and CySEC.

   As there is no CBN or SEC regulation on forex trading in Nigeria, it is important to seek a broker with a regulatory license from reputed financial regulatory authorities. Regulated brokers are less prone to cheat or default. Hence, the third-party risk or counterparty risk can be mitigated by choosing a well-regulated broker.

   Forex trading in Nigeria is not regulated by CBN or any other local financial regulatory authority. Hence clients must look out for the global regulatory licenses held by the broker and the regulation under which they are getting registered. Following are some of the regulatory authorities which regulate majority of the forex brokers accepting Nigerian clients.

   1. FSCA: The Fiancial Sector Conduct Authority (FSCA) is a top-tier financial regulatory authority in the jurisdiction of South Africa. FSCA was previously known as Financial Services Board (South Africa).

   South African clients are registered under FSCA regulation. However, an FSCA license can enhance the trust factor of the broker as it is the highest tier regulatory authority in Africa.

   2. FCA: The Financial Conduct Authority (FCA) is a top-tier financial regulatory authority in the jurisdiction of the United Kingdom. Clients residing in the United Kingdom are registered under the FCA regulation. Registered clients are also protected by up to $100,000 if the broker goes bankrupt or unsettled dispute.

   FCA regulatory regimes are among the most strict as the maximum leverage is 1:30. Nigerian clients are not registered under FCA regulation but a broker with FCA regulation can be considered much safer to trade.

   3. ASIC: The Australian Securities and Exchange Commission (ASIC) is an Australian financial regulatory authority. A broker with ASIC regulatory license can be considered safe but only the clients residing in the Australian Jurisdiction are registered under ASIC regulation.

   4. CySEC: The Cyprus Securities and Exchange Commission (CySEC) is a popular regulatory authority among the international CFD brokers. Cyprus is an island nation in the Mediterranian Sea but it a member of the European Economic Area (EEA).
   A regulatory license from CySEC allows brokers to accept clients from all the member countries of the EEA. Hence, most of the international forex and CFD brokers hold regulatory license from CySEC. Regulation from CySEC makes forex brokers safe but not as that from FSCA, FCA, or ASIC.

   5. IFSC: The International Financial Services Commission (IFSC) is a Financial Services Commission and a government agency of Belize. Belize is a Caribbean country on the northeastern coast of Central America. The entities of broker that are regulated under IFSC of Belize can accept clients from various countries of the world. Nigerian clients can also be registered under IFSC Belize regulation.

   6. FSA: The Financial Services Authority of Seychelles (FSAS) is also an island based financial regulatory authority that regulates international brokers. Nigerian clients are registered under FSA regulation by several brokers. Brokers with only FSA regulation can be considered of high risk compared to those who also have top-tier regulatory license.

   It must be noted that each broker can have multiple regulatory license and also have different legal entities and websites for each regulation. This means that trading condition can be different for clients residing in different countries. Clients must cross check regulatory license from regulator’s website and should also acknowledge the regulation under which they are getting registered.

   The following table describes the regulatory licenses held by the Best Regulated Forex Brokers in Nigeria.

   Broker	FSCA	FCA	ASIC	CySEC	IFSC	FSA
   HotForex	✔	✔		✔		✔
   XM				✔	✔
   Exness	✔	✔		✔		✔
   FXTM	✔	✔		✔
   OctaFX				✔
   Tickmill	✔	✔		✔		✔

   The number of years in the industry, financial transparency, audit report, details of the owners, etc. can also define the safety of traders with the chosen broker. Traders must check regulation and their safety with the broker before opening an account.

2. Local office in Nigeria

   Apart from the easily accessible websites of the brokers, the presence of a local office can further increase the trust factor. Some traders prefer to trade with regulated brokers that have a local office in Nigeria.

   Availability of local offices also allows traders to take advantage of the customer support service through local phone numbers. Although, it is not essential for a broker to provide local phone support if they have a local office in Nigeria.

3. Spreads and Fees

   The amount that you pay to the broker can greatly affect the profit and loss booked while trading. The spreads, commission, and all the fees involved in trading must be checked and compared thoroughly before finalizing a broker.

   Many brokers offer multiple account types. The trading, as well as non-trading fees associated with each account type, can be different. The spreads and commission can also differ based on the instrument selected by the trader. High-volume traders, scalpers, and many online traders prefer to trade with negligible spreads. Many brokers offer trading with spreads as low as 0 at the cost of a fixed commission. A commission of 4$ to 6$ is per standard lot for negligible spread is quite common among top forex and CFD brokers in Nigeria.

   The table below describes the average typical spread incurred by the best-regulated brokers in Nigeria for a round trade of 1 standard lot of the following instruments with their commission-free standard account types.

   Broker Name	Gold	EUR/USD	US 500 Index
   Hotforex	29	1.3	0.41
   Exness	30	1	0.15
   XM	35	0.7	0.4
   FXTM	90	1.8	0.6
   OctaFX	20	0.7	0.15
   Tickmill	21	1.8	0.39

    

   All the spreads mentioned are the typical average of variable spreads in pips per lot. It differs based on market conditions and liquidity in the market.

   The table describes and compares the trading fees at concerned brokers. Apart from this, some brokers may also incur non-trading fees that are charged without executing trade orders. The non-trading fees include inactivity fee, deposit/withdrawal fee, currency conversion fee, account opening fee, etc.

   Each forex and CFD broker also charges swap fees if a position is kept open overnight. This fee is charged once for every night the position is kept open. Each broker has its own mechanism to calculate the swap rates that are different for each instrument. Traders should check the swap rates of their preferred trading instruments before choosing a broker.

   Traders must enquire about every component of fees incurred at regulated forex and CFD brokers. The fees should also be compared with other brokers to seek the best available option in the market.

   Traders must note that some of the fake and unregulated brokers try to attract traders by charging substantially lower fees. Hence, fee comparison must be done among regulated brokers only and the fees should never be the only basis for selecting a broker in Nigeria.

4. Deposit and Withdrawal

   A broker with multiple top-tier regulations and low fees is of no use if the deposit and withdrawal methods are not convenient. Before opening an account with any of the regulated forex and CFD broker in Nigeria, one must check the accepted transaction methods.

   The lower cap on the deposit and withdrawal amount on the preferred mode of the transaction should be checked to prevent inconvenience while transacting. The minimum deposit amount can be different for each of the available methods. The processing time can also be different for each of the funding and withdrawal methods.

   Some brokers charge additional commission for withdrawal and deposit depending on the method selected while many brokers allow free transactions. Currency conversion charges may also be applicable if the deposit currency is different from the base currency of the account.

   Nigerian traders who wish to trade with NGN as base currency must check whether the broker offers Naira based trading account or not.

5. Trading Platform

   The trading platform is software that is designed to speculate the market and open/close trading positions online. Some brokers also offer their own trading platforms while many rely on third-party trading platforms.

   Metatrader 4 and Metatrader 5 are the most preferred trading platforms for forex and CFD trading globally. Some traders also prefer the cTrader trading platform.

   Traders must ensure that the trading software available with the regulated broker is user-friendly. They should also make themselves familiar with the terminologies and features to make better trading decisions.

   A demo account can be quite useful to check all the details of the trading platform before opening a real account.

6. Customer Support

   This may not be the most important factor to consider before choosing a forex broker but can be very helpful. It is always good to choose a forex broker that offers diligent customer support service. Traders must ensure that their queries are solved within time and the connectivity with the support executives should be fast and convenient.

   Most of the forex and CFD brokers in Nigeria offer live chat support to assist the clients. Traders can raise random queries on the live chat window before opening the account to check how supportive the staff is. Although, registered clients are generally served before unregistered clients.

   The availability of local Nigerian phone support can be highly advantageous for Nigerian clients. The phone support reduces time to solve queries and provides confidence to the traders. The best-regulated forex brokers generally provide excellent customer support service.

7. Research and Education
   The research and education tools are most important for the traders to enhance their skills and supplement their abilities. Traders cannot increase the probability of successful trades if adequate research is not done.

   Best regulated forex and CFD brokers in Nigeria offer a variety of tools to assist in the research and analysis of the market. Experienced traders always seek a broker that provides useful research tools. New traders must learn the basic terminologies, features, and strategies before entering the high-risk forex and CFD market. Hence, they should always seek a broker that provides multiple sources of learning and augment their knowledge into the market.

   Tools like Autochartist, algorithmic trading, automated trading, etc can be useful for experienced traders. Regular news fees and updates on international economic activities can greatly assist in the fundamental analysis of the forex and CFD market.

   Educational articles, videos, seminars, webinars, guides, etc can help a new trader to grasp the knowledge required to become an efficient trader.

Frequently Asked Questions – CBN Regulated Brokers in Nigeria