NIGERIA Law and Practice Contributed by: Isa Alade, Seyi Bella, Ayodele Adeyemi-Faboya and Ayomikun Ogunkanmi, Banwo & Ighodalo
cific instructions and take all reasonable steps to obtain the best possible result for a client while executing an order or a specific aspect of an order. In addition, the NGX rules on the registra - tion of market makers provide that every appli - cant who intends to be a market maker must ensure that they have in place a proper supervi - sory programme and a system to ensure proper Currently, the NGX has a market surveillance and investigation department whose primary mission is to protect the integrity of the capital market from fraud, manipulation and abusive practices and to ensure fair and orderly market and inves- tor protection. Additionally, the NGX launched the X-whistle, which is a whistle-blowing portal for secure and effective submission of informa - tion relating to violations of rules and regulations in the Nigerian capital market. X-Whistle allows any person to raise genuine concerns about unethical or unlawful conduct by market partici - pants on an anonymous basis to protect market integrity. In 2020, the NGX (then NSE) upgraded X-Whistle in order to strengthen investor pro - tection. The upgraded portal features a single repository for complaints, tips, and referrals, as well as the ability to generate detailed and varied reports with analytics for proper tracking. management of conflict of interest. 6.8 Market Integrity Principles Like the NGX, the FMDQ also has a market sur - veillance department that monitors members’ trading activities to ensure transparency, cred - ibility and integrity in the FMDQ markets. The FMDQ also takes disciplinary actions against its members for violations of the FMDQ rules and regulations and publishes compilations of these actions on its website monthly. The FMDQ whis - tle-blowing policy allows stakeholders (mem - bers, employees, regulators, investors, industry professionals, issuers and the general public) to
provide tips regarding activities/issues within the FMDQ portals.
7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations There are currently no regulations in relation to high-frequency and algorithmic trading in Nige - ria. Although high-frequency trading is not prevalent in Nigeria, the NGX Rulebook provides that firms wishing to be considered for market-making functionality when applying for a dealing mem - bership will need to meet higher technological requirement levels, which include the ability to manage, measure and control their portfolio risk using probability algorithms that take into con - sideration their open positions, borrowing inven - tory, and collateralised obligations. 7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity The SEC Rules and the ISA do not specifically provide for the registration of market makers in high-frequency and algorithmic trading when they are functioning in a principal capacity. 7.3 Regulatory Distinction Between Funds and Dealers There are no regulatory distinctions between funds and dealers engaged in high-frequency and algorithmic trading. 7.4 Regulation of Programmers and Programming There are currently no regulations for high-fre - quency and algorithmic trading and program - mers in Nigeria. However, the Robo-Advisory
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