Tinubu signs investments and securities 2025 bill into law

In a major boost to capital market regulation in Nigeria, President Ahmed Bola Tinubu has assented to the Investments and Securities Bill (ISB) 2025, which repeals the Investments and Securities Act No. 29 of 2007 and enacts the Investments and Securities Act 2025.

This landmark legislation strengthens the legal framework of the Nigerian capital market, enhances investor protection, and introduces critical reforms to promote market integrity, transparency, and sustainable growth.

The enactment of the ISA 2025 reaffirms the authority of the SEC as the apex regulatory authority of the Nigerian capital market, empowering it to regulate the market to ensure capital formation, protect investors, maintain a fair, efficient, and transparent market, and reduce systemic risks.

The Act also introduces transformative provisions to further align Nigeria’s market operations with international best practices.

Speaking on the key highlights of the Act, the Director General of the SEC, Dr. Emomoitimi Agama, said, “The Act enhances the regulatory powers of the SEC in a manner comparable with benchmark global securities regulators. These enhanced powers and functions ensure full conformity with the requirements of IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), enabling the SEC to retain its ‘Signatory A’ status and enhancing the overall attractiveness of the Nigerian capital market.”

He noted that other notable provisions of the ISA 2025 include the classification of exchanges and the 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. Additionally, there are new provisions on financial market infrastructures, such as central counterparties, clearinghouses, and trade depositories.

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Other highlights of the Act include the expansion of the definition and understanding of securities. The Act explicitly recognizes 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.

Furthermore, the Act introduces comprehensive insolvency provisions for financial market infrastructures. These provisions exempt transactions facilitated through or involving financial market infrastructures from the application of general insolvency laws. It also addresses the management of systemic risk by introducing provisions for monitoring, managing, and mitigating systemic risk in the Nigerian capital market.

Another significant highlight is the expansion of the category of issuers to the public, marking a key step towards introducing a wide range of innovative products and offerings, as well as facilitating “commercial and investment business activities,” subject to the approval of the Commission and other controls stipulated in the Act.

The SEC boss disclosed that the Act contains a new section that provides for the regulation of commodities exchanges and warehouse receipts. These provisions are essential to developing the entire gamut of the commodities ecosystem.

Regarding the issuance of securities by sub-nationals and their agencies, the Act addresses existing restrictions on raising funds from the capital market by sub-nationals, allowing for greater flexibility.

The Act also introduces the mandatory use of Legal Entity Identifiers (LEIs) by participants in capital market transactions. This stipulation is designed to improve transparency in securities transactions and expressly prohibits Ponzi schemes and other unlawful investment schemes, prescribing stringent jail terms and other sanctions for the promoters of such schemes.

To strengthen the Investments and Securities Tribunal, the Act amends key provisions in the repealed ISA 2007 related to the composition of the Tribunal, the constitution of the Tribunal, the qualification and appointment of the Chief Registrar, and the Tribunal’s jurisdiction. These amendments are intended to enhance the Tribunal’s ability to optimally discharge its mandate.

Agama lauded the President’s assent as a transformative step for the capital market, stating that the ISA 2025 reflects a 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 toward achieving this historic milestone and solicit their continued collaboration in the effective implementation of the ISA 2025 for the benefit of our economy.”

“The SEC extends its profound appreciation to the National Assembly for its patriotism and dedication in enacting this new legal framework for the Nigerian capital market. The meticulous deliberations, extensive stakeholder engagements, and bipartisan support demonstrated throughout the legislative process highlight the National Assembly’s resolve to foster economic growth and enhance investor confidence.

“We also commend the 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 realization 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,” Agama said.