By Adedapo Adesanya

In a major boost to capital market regulation in Nigeria, President Bola Tinubu recently assented to the Investments and Securities Bill (ISB) 2025, which repeals the Investments and Securities Act No. 29 of 2007 and enacts the Investments and Securities Act 2025.

This landmark legislation strengthens the legal framework of the Nigerian capital market, enhances investor protection, and introduces critical reforms to promote market integrity, transparency, and sustainable growth.

The news has sent ripples of excitement across the capital market landscape in the country as it will regulate the market to ensure capital formation, protect investors, maintain a fair, efficient, and transparent market, and reduce systemic risks.

The Act reaffirms the authority of the SEC as the apex regulatory authority of the Nigerian Capital Market, as well as to The Act also introduces transformative provisions to further align Nigeria’s market operations with international best practices.

According to the Director General of the SEC, Mr Emomoitimi Agama, said, “The Act enhances the regulatory powers of the SEC in a manner comparable to benchmark global securities regulators.” These enhanced powers and functions ensure full conformity with the requirements of IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), enabling the SEC retain its “Signatory A” status and enhancing the overall attractiveness of the Nigerian capital market.

He said that other notable provisions of the ISA 2025 include the Classification of Exchanges and the inclusion of provisions on financial market infrastructures. The Act classifies Securities Exchanges into Composite and Non-composite Exchanges – A Composite Exchange is one in which all categories of securities and products can be listed and traded. At the same time, a Non-composite Exchange focuses on a singular type of security or product.

There are also new provisions on Financial Market Infrastructures, such as Central Counterparties, Clearing Houses, and Trade Repositories.

Other highlights of the Act are the Expansion of the definition and Understanding of Securities. The Act explicitly recognises virtual/digital assets and investment contracts as securities and brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs) and Digital Asset Exchanges under the SEC’s regulatory purview.

The Act introduces provisions for monitoring, managing, and mitigating systemic risk in the Nigerian capital market.

The Act expands the categories of issuers, as a key step towards the introduction of a wide range of innovative products and offerings as well as the facilitation of “commercial and investment business activities”, subject to the approval of the Commission and other controls stipulated in the Act.”

The SEC head disclosed that the Act contains a new Part which provides for the regulation of Commodities Exchanges and Warehouse Receipts. These provisions are essential to enable the development of the entire commodities ecosystem.

On the Issuance of Securities by Sub-Nationals and their Agencies, salient provisions of the Act addressed existing restrictions in respect of raising of funds from the capital market by Sub-Nationals to allow for greater flexibility in this regard.

He said that The Act introduces the mandatory use of Legal Entity Identifiers (LEIs) by participants in capital market transactions. This stipulation is designed to improve transparency in the conduct of securities transactions. It prohibits Ponzi Schemes and other unlawful investment schemes, while prescribing stringent jail terms and other sanctions for the promoters of such schemes.

In a bid to strengthen the Investments and Securities Tribunal, the Act amends some key provisions in the repealed ISA 2007 pertaining to the Composition of the Tribunal, constitution of the Tribunal, qualification and appointment of the Chief Registrar as well as the jurisdiction of the Tribunal to enhance the ability of the Tribunal to discharge its mandate optimally.

Mr Agama lauded the President’s assent as a transformative step for the capital market, saying that the ISA 2025 reflects a commitment to building a dynamic, inclusive, and resilient capital market.

“By addressing regulatory gaps and introducing forward-looking provisions, the new Act empowers the SEC to foster innovation, protect investors more efficiently and reposition Nigeria as a competitive destination for local and foreign investments. We commend all stakeholders within and outside the capital market community for their unwavering solidarity towards the achievement of this historic milestone and solicit their continued collaboration in respect of the effective implementation of the ISA 2025 for the benefit of our economy.”

“The SEC extends its profound appreciation to the National Assembly for its patriotism and dedication in enacting this new legal framework for the Nigerian capital market. The meticulous deliberations, extensive stakeholder engagements, and bi-partisan support demonstrated throughout the legislative process highlight the National Assembly’s resolve to foster economic growth and enhance investor confidence.

“We also commend the Honourable Minister of Finance and Coordinating Minister of the Economy of Nigeria as well as the Minister of State for Finance for their invaluable contributions to the realisation of this groundbreaking project. Their strategic guidance, policy expertise, and steadfast support have ensured that the ISA 2025 aligns with Nigeria’s broader economic objectives.”

On his part, Mr Oluropo Dada,  the 13th President and Chairman of Council of the Chartered Institute of Stockbrokers (CIS) lauded the move.

“This Act is a testament to our collective commitment to advancing the capital market and securing its future as a catalyst for economic growth and prosperity,” adding that it made sure that the voices of market operators, investors, and financial experts were well represented.

“The enactment of the Investment and Securities Act 2024 underscores the government’s commitment to fostering transparency, efficiency, and stability in the country’s financial markets.” .

“As capital market professionals, we are confident that this Act will deepen market integrity, boost investor confidence, and expand the range of investment opportunities available to Nigerians and global investors alike.

“As we enter this new era of capital market transformation, I urge all stakeholders—regulators, market operators, investors, and policymakers—to continue working collaboratively to ensure the seamless implementation of the Act’s provisions.

“The Chartered Institute of Stockbrokers remains committed to providing the necessary professional expertise, advocacy, and capacity-building initiatives required to maximise the benefits of this law for all market participants,” he noted.