Market leaders urge SEC to extend recapitalisation deadline to 2027

…say deadline would weaken investors’ confidence 

Top capital market operators, economists, and industry leaders have called on the Securities and Exchange Commission (SEC) to extend the timeline for the ongoing capital market recapitalisation programme, warning that the current 18-month deadline could strain the financial system and weaken investor confidence ahead of Nigeria’s 2027 general elections.

At the first quarter round table of Capital Market Academics of Nigeria (CMAN), industry stakeholders argued that the recapitalisation exercise, while necessary to strengthen the capital market, must reflect Nigeria’s political cycle, macroeconomic realities, and the structure of the financial system.

Nigeria’s capital market is facing one of its most far-reaching regulatory resets in over a decade as the SEC announced steep increases, ranging from threefold to more than 30-fold, in minimum capital requirements for market operators, including a new N10 billion threshold for exchanges and central counterparties, N5 billion for large portfolio managers, and N2 billion for broker-dealers.

In a circular dated January 16, 2026, the Commission said the revised framework, last reviewed in 2015, is designed to strengthen market resilience, enhance investor protection and align capital adequacy with the growing scale, sophistication and risk profile of Nigeria’s capital market.

Leading the call, Professor Uche Uwaleke, CMAN President, said the political uncertainty that typically surrounds election cycles could significantly affect capital mobilisation.

“Election years are characterised by uncertainty and investor caution. Instead of an 18-month window, the Commission should consider a 24-month timeline, extending the exercise to December 2027,” he said, while affirming strong support for the recapitalisation policy itself.

Supporting the call, Dr. Bayo Olugbemi, Past President of the Institute of Capital Market Registrars and the Chartered Institute of Bankers of Nigeria (ICMR), said industry consultations had produced a consensus around a two-year timeline.

ALSO READ: CBN hints on banks that have met recapitalisation requirements ahead of deadline

“Most operators agree that 24 months is more realistic. The industry believes December 2027 provides a more practical window for implementation,” he stated.

Beyond politics, stakeholders warned of systemic pressure on the financial sector, noting that multiple industries are currently undergoing recapitalisation exercises simultaneously.

Tunde Amolegbe, Past President of the Chartered Institute of Stockbrokers (CIS) cautioned that banks, pension fund administrators, insurance companies, and now capital market operators are all sourcing capital at the same time, creating what he described as “a recapitalisation overload.”

“Capital market operators are also expected to support other sectors in raising capital. Forcing them to recapitalise at the same time weakens their ability to perform that role,” he said.

From an academic and policy perspective, Professor Lionel Effion, an economist at the University of Calabar, said while the proposed timeline meets global technical standards, Nigeria’s political economy makes an extension necessary.

“By mid-2027, the country will be just coming out of elections, a period historically marked by risk aversion and delayed investments. Extending the timeline to 24 months aligns better with both local realities and international best practice,” he noted.

Professor Effion also raised concerns about the structure of the recapitalisation framework, warning against a “one-size-fits-all” capital requirement across a diverse market.

He argued that Nigeria’s capital market consists of large diversified institutions, mid-sized specialist firms, and small niche operators, each with different risk profiles, earnings capacity, and funding structures.

“Uniform capital thresholds ignore the heterogeneity of the market. The policy should recognise retained earnings as core capital and avoid forcing unnecessary restructuring, ownership dilution, and inefficient capital raising,” he said.

On non-interest financial institutions, stakeholders also urged regulatory differentiation, noting that their asset-backed, low-leverage structures differ fundamentally from conventional operators and should not be subjected to identical capital thresholds.

In their closing remarks, panelists called on the SEC to adopt a phased, flexible, and differentiated recapitalisation framework, engage with regulators such as the Corporate Affairs Commission to reduce compliance costs, and design a model that strengthens market stability without stifling growth or financial inclusion.

Despite the concerns, stakeholders unanimously affirmed support for the recapitalisation programme, describing it as essential to strengthening investor protection, deepening market liquidity, and positioning Nigeria’s capital market as a stronger engine of economic growth.

“The issue is not whether capital should rise,” one participant said. “The issue is how, when, and in what structure, so that the reforms strengthen the market rather than distort it.”