Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) came bearing the good news at the weekend: a presidential assent to the much-awaited Investments and Securities Bill, 2025.
President Bola Tinubu signed the bill into law, repealing the Investments and Securities Act No. 29 of 2007 and enacting the Investments and Securities Act 2025.
The National Assembly had transmitted the bill to Tinubu for his assent on February 18.
The ISA 2007 was repealed due to its shortcomings. According to industry experts, the repealed Act, among others, failed to provide a regulatory framework for digital assets, and other fintech innovations. It also did not adequately address the challenges posed by fraudulent investment schemes such as Ponzi schemes.
However, the ISA 2025 reaffirms the authority of the SEC as the apex regulatory authority of the Nigerian Capital Market.
The new act also introduces transformative provisions to further align Nigeria’s market operations with international best practice.
The SEC in a statement described the presidential assent as a “transformative step” toward enhancing investor protection, improving market transparency, and fostering sustainable growth.
A major achievement of the ISA 2025 is the expansion of SEC’s regulatory powers to meet the standards of global bodies such as the International Organisation of Securities Commissions (IOSCO).
The SEC stated that the enhanced regulatory powers would allow it to maintain its “Signatory A” status under IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), a critical benchmark for credibility in global financial markets.
The act also introduces structural reforms and innovations across various dimensions of Nigeria’s capital market, with implications for exchanges, digital asset operators, commodities trading, and systemic risk management.
One of the pivotal reforms introduced by the ISA 2025 is the classification of exchanges into Composite and Non-composite categories.
Composite exchanges are allowed to list and trade all categories of securities and products, while Non-composite exchanges are limited to specific asset classes.
The act provides a legal framework for regulating financial market infrastructures such as clearing houses, trade depositories, and central counterparties—critical components of a well-functioning capital market.
The law also brings much-needed regulatory clarity to the digital asset space. Virtual assets and investment contracts are formally recognised as securities.
The act introduces stronger enforcement mechanisms in response to the proliferation of financial scams and ponzi schemes in Nigeria.
The legal framework also empowers SEC to monitor and manage systemic risks in the capital market to prevent the kind of widespread disruption that can result from financial shocks.
The SEC Director-General, Dr. Emomotimi Agama, said “The ISA 2025 reflects our commitment to building a dynamic, inclusive, and resilient capital market.”
Agama added that “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.”
He commended the National Assembly for its patriotism and bipartisan support throughout the legislative process, adding that extensive stakeholder engagement helped shape the provisions of the law.
The ISA 2025 also came as a boost for the SEC as the regulator has been welding the big sticks in its drive to ‘name and shame’ capital market operators (CMOs) violating market regulations.
In a notice via its official X page recently, SEC said it would begin publishing the names of defaulting CMOs in a “name and shame” journal.
SEC wields big sticks
The regulator recently announced the cancellation of the registration of Mainland Trust Limited and the suspension of Centurion Registrars. The commission in separate circulars said the sanctions were imposed following the failure of both firms to comply with regulatory directives.
The SEC also suspended Centurion Registrars Limited, its directors and sponsored individuals from capital market activities with immediate effect. The SEC said the suspension pursuant to the powers of the commission under Section 38(4) & (5) of the Investments and Securities Act, 2007 and Rule 34(1)(e) of the SEC Consolidated Rules and Regulations 2013 followed the company’s failure to comply with regulatory directives and non-resolution of several complaints against it.
In January, SEC warned Nigerians against engaging in any investment-related transactions with two investment platforms. The platforms are Risevest Cooperative Multipurpose Society Limited and Stecs Multipurpose Cooperative Society, popularly known as Stecs.
In the New Year message, the SEC said it would intensify efforts to stamp out ponzi and pyramid schemes while paving the way for legitimate investment opportunities to thrive in 2025.
Prof Uche Uwaleke, who is the Director of the Institute of Capital Market Studies at the Nasarawa State University, Keffi and President of the Capital Market Academics of Nigeria, said the freshly minted ISA 2025 will spur capital market growth in Nigeria.
With ISA 2025, he said “Nigeria can now boast of a modernised and globally aligned regulatory framework, which has addressed key issues such as digital assets, investor protection and financial market infrastructure, all geared towards boosting investor confidence and strengthening the capital market in Nigeria.”
He pointed out the pitfalls of the repealed act.
According to him, there were no comprehensive provisions regulating clearing houses, trade depositories, and central counterparties which increased the risk of systemic failures in the financial market and made it more difficult to manage crises.
Uwaleke said the defunct act did not make adequate provisions for the regulation of commodity exchanges and derivatives markets, limiting structured financing for agriculture and mining.
The expert therefore finds the ISA 2025 “A more transparent, efficient, and competitive capital market consistent with global standards set by the IOSCO,” saying its implementation would strengthen investor confidence, enhance market integrity and encourage foreign investment.
“All said, the enactment of ISA 2024 is a welcome development that promises to modernise Nigeria’s investment and securities laws, improve regulatory oversight, protect investors, and support emerging financial technologies,” he said.