President Bola Tinubu has assented to the Investments and Securities Act (ISA) 2025, which repealed the Investments and Securities Act No. 29 of 2007.
The new landmark legislation strengthens the legal framework of the Nigerian capital market and enhances investor protection.
Besides, the new Act introduces critical reforms to promote market integrity, transparency, and sustainable growth.
The enactment of the ISA 2025 reaffirmed the authority of the Securities and Exchange Commission (SEC) as the apex regulatory authority of the Nigerian capital market.
Director General, Securities and Exchange Commission (SEC), Dr Emomotimi Agama, who confirmed the presidential assent yesterday, said the new Act introduces transformative provisions that further align Nigeria’s market operations with international best practice.
Said he: “The ISA 2025 reflects our 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.”
According to him, the Act enhances the regulatory powers of the SEC in a manner comparable with benchmark global securities regulators.
He added that the 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.
There were also several other notable provisions of the ISA 2025.
In the area of classification of Exchanges and 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, while 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 Counter Parties, Clearing Houses and Trade Depositories.
The Act expands the definition and understanding of securities by explicitly recognising 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.
It also provides comprehensive insolvency provisions for Financial Market Infrastructures by introducing provisions that exempt transactions facilitated through or otherwise involving Financial Market Infrastructures from the application of general insolvency laws.
In the area of management of systemic risk, the Act introduces provisions for the monitoring, management and mitigation of systemic risk in the Nigerian capital market.
It also expands the category of issuers to the public, 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.
There is also legal framework for commodities exchanges. The Act contains a new part which provides for the regulation of Commodities Exchanges and Warehouse Receipts. These provisions are essential to allow for the development of the entire gamut of the Commodities ecosystem.
In the area of issuance of securities by sub-nationals and their agencies, salient provisions of the Act address existing restrictions in respect of raising of funds from the capital market by Sub-Nationals to allow for greater flexibility in this regard.
In terms of transparency in securities transactions, the new 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.
In a major enhancement of investor protection, the Act expressly prohibits Ponzi Schemes and other unlawful investment schemes, while prescribing stringent jail terms and other sanctions for the promoters of such schemes.
It also strengthens the Investments and Securities Tribunal by amending 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 optimally discharge its mandate.
SEC extended its profound appreciation to the National Assembly for its patriotism and dedication in enacting this new legal framework for the Nigerian capital market.
Agama noted that 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.
“The SEC would continue to engage with market operators, investors, and all stakeholders to ensure a seamless transition from the repealed ISA 2007 to the new legal regime established under the ISA 2025,” Agama said.
