In a significant move to strengthen Nigeria’s capital market, President Bola Ahmed Tinubu has signed the Investments and Securities Bill (ISB) 2025 into law. This new legislation repeals the Investments and Securities Act No. 29 of 2007, ushering in a modernized regulatory framework designed to enhance market integrity, transparency, and investor protection.
The enactment of the Investments and Securities Act (ISA) 2025 reaffirms the Securities and Exchange Commission (SEC) as the apex regulatory body for Nigeria’s capital market. It grants the SEC enhanced authority to oversee capital formation, safeguard investors, ensure a fair and efficient market, and mitigate systemic risks. The Act also aligns the country’s market operations with global best practices.
SEC Director General, Dr. Emomoitimi Agama, highlighted that the ISA 2025 bolsters the Commission’s regulatory capabilities, bringing them in line with international standards. “This legislation enhances the SEC’s powers to ensure full compliance with IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), allowing Nigeria to maintain its ‘Signatory A’ status and boosting investor confidence,” Agama stated.
A key feature of the Act is the classification of securities exchanges into composite and non-composite categories. Composite exchanges will accommodate all types of securities and products, while non-composite exchanges will specialize in specific securities. Additionally, the Act introduces regulations for financial market infrastructures, including central counterparties, clearinghouses, and trade depositories.
One of the Act’s most groundbreaking provisions is the explicit recognition of virtual and digital assets as securities. This move brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under the SEC’s regulatory scope, ensuring greater oversight and investor protection in the fast-growing digital finance sector.
The ISA 2025 also includes comprehensive insolvency provisions for financial market infrastructures. These measures exempt transactions involving financial market infrastructures from general insolvency laws and introduce mechanisms to monitor and mitigate systemic risks within the capital market.
Expanding Investment Opportunities
Another notable provision expands the category of issuers allowed to raise funds from the capital market. This reform paves the way for innovative investment products and commercial ventures, subject to SEC approval and compliance with regulatory controls.
The Act also introduces stricter regulations for commodities exchanges and warehouse receipts, aiming to strengthen the commodities trading ecosystem. Additionally, it provides more flexibility for sub-national entities to raise capital, lifting previous restrictions on fund generation from the market.
A major step in investor protection is the mandatory use of Legal Entity Identifiers (LEIs) for capital market participants, enhancing transparency in securities transactions. The Act also explicitly outlaws Ponzi schemes and other fraudulent investment operations, imposing stringent penalties, including prison terms, for violators.
Strengthening the Investments and Securities Tribunal
To reinforce dispute resolution mechanisms, the ISA 2025 revises key provisions governing the Investments and Securities Tribunal. These amendments refine the Tribunal’s composition, appointment criteria, and jurisdiction, ensuring greater efficiency in adjudicating capital market disputes.
Government and Stakeholder Reactions
Dr. Agama praised President Tinubu’s approval of the Act, calling it a transformative milestone for Nigeria’s financial landscape. “By closing regulatory gaps and introducing forward-looking provisions, the ISA 2025 empowers the SEC to drive innovation, protect investors, and position Nigeria as a competitive investment hub,” he remarked.
He also commended the National Assembly for its bipartisan support in passing the bill, acknowledging their dedication to fostering economic growth and investor confidence. Additionally, he expressed gratitude to the Minister of Finance and Coordinating Minister of the Economy, as well as the Minister of State for Finance, for their strategic input in shaping the legislation to align with Nigeria’s broader economic objectives.
With the ISA 2025 now in effect, Nigeria’s capital market is set to undergo significant transformation, promising increased investor confidence, enhanced regulatory oversight, and a more dynamic financial ecosystem.
