President Bola Ahmed Tinubu has officially signed the Investment and Securities Act 2025 into law. The new legislation marks a significant shift in Nigeria’s capital market framework, replacing the Investment and Securities Act of 2007.
The Securities and Exchange Commission (SEC) has described the new law as a major step towards improving investor protection, increasing market transparency, and fostering long-term growth. The Act introduces several reforms aimed at strengthening financial market regulations and aligning them with international best practices.
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One of the key changes introduced by the Investment and Securities Act 2025 is the expansion of SEC’s regulatory powers. The Act enables SEC to maintain its standing under the International Organization of Securities Commissions (IOSCO), ensuring Nigeria’s capital market meets global standards.
The new law also enhances SEC’s oversight of financial market infrastructures, including clearing houses, trade depositories, and central counterparties. These changes are designed to improve market efficiency and reduce financial risks.
Regulating Digital Assets and Commodities
A major highlight of the Investment and Securities Act 2025 is the recognition of digital assets as securities. Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges will now operate under SEC’s supervision. This move is expected to protect investors and curb fraudulent activities in the digital asset space.
Additionally, the Act establishes a legal framework for commodity exchanges and warehouse receipts. This reform aims to boost agriculture and mining by providing structured financing and reducing market risks.
New Provisions for Capital Raising
The Investment and Securities Act 2025 also introduces measures to improve capital raising in Nigeria. State governments and government agencies now have greater flexibility to raise funds through the capital market. This could open new financing opportunities for infrastructure projects and reduce reliance on commercial loans.
The Act also expands the categories of entities permitted to issue securities, encouraging broader market participation and supporting business growth.
Tackling Ponzi Schemes and Market Fraud
The new law takes a firm stance against fraudulent investment schemes. It explicitly prohibits Ponzi schemes and other illegal financial activities, imposing strict penalties, including imprisonment, on those found guilty.
By strengthening regulatory enforcement, the Investment and Securities Act 2025 aims to restore investor confidence and protect Nigerians from financial scams that have plagued the market.
Improving Market Stability and Transparency
Another key reform under the Investment and Securities Act 2025 is the exemption of certain financial transactions from insolvency laws. This provision ensures that transactions processed through clearing houses or central counterparties remain protected during financial crises.
To further improve transparency, the Act mandates the use of Legal Entity Identifiers (LEIs) for all securities transactions. LEIs will help regulators track financial activities more effectively and reduce the risk of fraudulent transactions.
SEC and Stakeholders Welcome the Law
Dr. Emomotimi Agama, the Director-General of SEC, has praised the signing of the Investment and Securities Act 2025, calling it a major step forward for Nigeria’s capital market.
“The ISA 2025 reflects our commitment to building a dynamic, inclusive, and resilient capital market,” Agama said. “By addressing regulatory gaps and introducing forward-looking provisions, this Act empowers the SEC to foster innovation, protect investors, and reposition Nigeria as a competitive investment destination.”
The SEC also acknowledged the role of the National Assembly and the Ministry of Finance in shaping the law. According to the Commission, the collaborative efforts of various stakeholders ensured that the new Act aligns with Nigeria’s broader economic strategy.
What the Investment and Securities Act 2025 Means for Nigerians
With the signing of the Investment and Securities Act 2025, Nigeria’s capital market is expected to experience renewed investor confidence. The clear regulatory framework for digital assets and commodities, combined with stronger investor protections, will likely attract both local and foreign investors.
The law also provides a more stable investment environment by ensuring that financial transactions remain secure during economic uncertainties. Additionally, its strict measures against Ponzi schemes will protect Nigerians from fraudulent investment schemes.
By modernising the country’s capital market regulations, the Investment and Securities Act 2025 sets the stage for sustainable economic growth, increased investment opportunities, and greater financial inclusion for Nigerians.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
- Emmanuel Ochayi
- Emmanuel Ochayi
