The Securities and Exchange Commission (SEC) of Nigeria has underscored accountability and transparency as indispensable pillars for enhancing investor confidence within the nation’s capital market.
Emomotimi Agama, the Director-General of the SEC, has articulated that the trust investors place in financial institutions and market operators is fundamentally contingent upon their demonstration of responsible stewardship and openness in operations.
In a statement on Sunday, the SEC stated that robust internal control mechanisms over financial reporting are not merely regulatory formalities but vital tools to preserve market integrity and foster trust among investors.
The SEC highlighted that internal controls, whether within public companies, securities markets, or other organisations, serve to reinforce principles of accountability, transparency, and integrity that underpin a healthy financial ecosystem. The practical implication is clear: investors are more inclined to commit their resources when they have assurance that those managing their investments adhere strictly to governance and ethical standards.
Commenting on the newly enacted Investments and Securities Act (ISA) 2025, Agama noted that this legislative overhaul introduces transformative reforms designed to promote a more transparent, efficient, and resilient capital market.
The ISA 2025, signed into law in March 2025, represents the most significant reform in nearly two decades, replacing the 2007 Act. It responds to the evolving landscape of global finance, including the rise of digital assets and complex financial instruments, and aligns Nigeria’s regulatory regime with international best practices.
Among the ISA 2025’s key enhancements is the empowerment of the SEC with broadened supervisory powers comparable to leading global regulators. This includes stronger investigative and enforcement authority, enabling the commission to tackle systemic risks effectively and take decisive action against fraudulent schemes.
The act also introduces stricter penalties for market misconduct, ranging from significant fines to imprisonment, which collectively strengthen deterrence against malfeasance.
Furthermore, the ISA addresses investor protection more comprehensively than before, mandating the remittance of unclaimed dividends to a trust fund under SEC supervision and expanding the scope of the Investor Protection Fund (IPF) to compensate investors adversely affected by insolvency or negligence.
Such mechanisms create safety nets that bolster market confidence. The act also brings digital assets under direct regulation, recognising virtual currencies and related products as securities and imposing licensing requirements on service providers, thereby mitigating risks associated with these emerging markets.
On market infrastructure, the ISA 2025 classifies securities exchanges into composite and non-composite categories, providing clarity and specialisation within the capital market environment. It also establishes regulatory frameworks for financial market infrastructures like clearinghouses and central counterparties, which are crucial for transaction stability.
Additionally, provisions concerning commodity exchanges and warehouse receipts signal the commitment to developing Nigeria’s commodities ecosystem, fostering diversification.
The empowering legislation facilitates broader capital raising by allowing states and local governments greater access to the capital markets, thereby promoting infrastructure development and fiscal decentralisation. Overall, the ISA 2025 aims to create a more investor-friendly landscape characterised by accountability, transparency, and legal certainty.
Echoing this legislative optimism, the SEC reaffirms its commitment to professionalism and adherence to the law as the driving forces behind ongoing improvements in Nigeria’s capital market. Director-General Agama explained that increased investor confidence is already palpable and credited the ISA’s reforms as pivotal to this positive momentum.
