NIGERIA Law and Practice Contributed by: Isa Alade, Seyi Bella, Ayodele Adeyemi-Faboya and Ayomikun Ogunkanmi, Banwo & Ighodalo
ciencies in the country’s AML and CFT frame - work. This designation indicates that Nigeria is under increased monitoring due to strategic shortcomings in its AML/CFT regime. Nigerian regulators have been concentrating on getting Nigeria removed from the grey list. Nigeria has made some progress since the grey - listing. In a meeting held on 25 October 2024, the FATF approved Nigeria’s fourth progress report since the country was placed on the grey list in February 2023 2.16 Reverse Solicitation In Nigeria, reverse solicitation has historically permitted foreign entities to offer regulated prod - ucts and services without triggering local regula - tions – albeit, it remains a practice that is merely tolerated, and its scope and limitations have yet to be fully tested. 3. Robo-Advisers 3.1 Requirement for Different Business Models Robo-advisers for cryptocurrencies will be regarded as DISPs under the ARIP and regulat - ed as such. In contrast, robo-advisers for other securities may be regulated under the general Rules on Robo-Advisory Services in Nigeria (the “Robo-Advisory Rules” ) issued by the SEC in a bid to regulate the adoption and deployment of robo-advisory services in the Nigerian capital market. Both the ARIP and Robo-Advisory Rules are silent on the types of business models that can be established, however the Robo-Advisory Rules in particular recognise that the services provided by robo-advisers can be fully automat -
ed – with no human intervention in the entire advisory process. 3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers Robo-advisory solutions have been sparsely deployed in providing financial advisory servic - es in Nigeria as traditional (human) models con - tinue to remain popular. Nevertheless, numer - ous investech solutions (such as RiseVest and Cowrywise) use robo-advisory-based interfaces (ie, the process of gathering information from a client/user through surveys and questionnaires, then investing or providing investment recom - mendations based on such data). Predominant - ly, legacy asset management/stockbroking firms have implemented automated solutions more often for first-link interfaces with customers. 3.3 Issues Relating to Best Execution of Customer Trades Robo-advisory services are limited in their deployment in Nigeria. However, regulators have taken a proactive approach in ensuring that robo-advisers – as they expand in the Nigerian market – ensure the best execution of customer trades. In July 2018, the Nigerian Exchange Group Plc (then the Nigerian Stock Exchange, or NSE) issued the Rules on Order Handling and Best Execution (NGX Order Handling Rules), which stockbrokers/dealing members – whether they utilise technology solutions in their service offer - ings or not – are required to comply with in the execution of customer trades. The Robo-Advi - sory Rules also seek to regulate the adoption and deployment of robo-advisory services in the Nigerian capital market and set out compliance requirements and standards that robo-advisers in Nigeria are required to adhere to when ensur - ing adequate protection for their clients.
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