In a decisive move to fortify Nigeria’s capital markets, President Ahmed Bola Tinubu, GCFR, has signed into law the Investments and Securities Act (ISA) 2025, repealing the Investments and Securities Act No. 29 of 2007.
This landmark legislation introduces comprehensive reforms aimed at strengthening market integrity, enhancing investor protection, and aligning Nigeria’s financial ecosystem with global best practices.
The newly enacted ISA 2025 reaffirms the Securities and Exchange Commission (SEC) as the preeminent regulatory body overseeing the Nigerian capital market.
With a focus on fostering capital formation, investor confidence, and systemic risk reduction, the Act provides a robust framework to ensure transparency, efficiency, and sustainable market growth.
A statement issued over the weekend by the SEC’s Head of External Relations, Mrs. Efe Ebelo, highlighted remarks from the SEC Director-General, Dr. Emomoitimi Agama.
He emphasized that the Act significantly enhances the regulatory powers of the SEC, aligning it with global standards such as the International Organization of Securities Commissions’ (IOSCO) Enhanced Multilateral Memorandum of Understanding (EMMoU). This alignment preserves Nigeria’s “Signatory A” status, bolstering the market’s appeal to both domestic and foreign investors.
The ISA 2025 introduces critical provisions designed to modernize Nigeria’s financial landscape:
•Market Structure Revisions: The Act classifies Securities Exchanges into Composite and Non-composite Exchanges. Composite Exchanges facilitate the listing and trading of all securities, while Non-composite Exchanges specialize in specific asset classes. Additionally, the Act formalizes the role of Financial Market Infrastructures, including Central Counterparties, Clearing Houses, and Trade Depositories.
•Expanded Securities Definition: The Act explicitly recognizes digital assets and investment contracts as securities, bringing Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under the SEC’s regulatory jurisdiction.
•Strengthened Financial Market Stability: By incorporating comprehensive insolvency provisions, the Act ensures that transactions executed through Financial Market Infrastructures remain protected from general insolvency laws. Furthermore, new measures for systemic risk monitoring and mitigation enhance market resilience.
•Broadened Issuer Categories: The Act expands the scope of eligible issuers, enabling a wider range of financial instruments and investment vehicles, subject to SEC approval. This paves the way for innovative capital-raising mechanisms and economic diversification.
•Commodities Market Development: A dedicated section now governs the regulation of Commodities Exchanges and Warehouse Receipts, fostering a more structured and efficient commodities trading ecosystem.
•Sub-National Market Access: Restrictions on capital raising by sub-national entities have been eased, allowing for more flexible financing mechanisms to support economic development initiatives at state and regional levels.
To promote transparency and market integrity, the Act mandates the use of Legal Entity Identifiers (LEIs) in capital market transactions. It also explicitly prohibits Ponzi schemes and other fraudulent investment ventures, prescribing stringent penalties, including prison terms, for violators.
Key amendments enhance the structure and jurisdiction of the Investments and Securities Tribunal, refining provisions related to its composition, the appointment of its Chief Registrar, and adjudicatory powers. These changes are expected to improve dispute resolution efficiency within the capital market.
Dr. Agama lauded President Tinubu’s endorsement of the Act, calling it a transformative milestone for Nigeria’s financial sector. “By closing regulatory loopholes and introducing progressive policies, ISA 2025 empowers the SEC to drive innovation, safeguard investors, and position Nigeria as a globally competitive investment hub,” he stated. He also commended stakeholders across the financial sector for their unwavering support in shaping this legislation.
The SEC extended its gratitude to the National Assembly for its diligence in crafting the new legal framework, acknowledging the bipartisan commitment to fostering economic growth and investor confidence. Furthermore, appreciation was expressed to the Minister of Finance and the Coordinating Minister of the Economy for their strategic guidance in ensuring that ISA 2025 aligns with Nigeria’s broader economic objectives.
With its sweeping reforms and future-ready provisions, the Investments and Securities Act 2025 stands as a testament to Nigeria’s ambition to solidify its capital markets as a beacon of integrity, innovation, and global competitiveness.
