The Nigeria Securities and Exchange Commission (SEC) has recently issued a circular revising the minimum capital requirements for various regulated entities in the capital market.
Issued pursuant to the Commission’s statutory mandate under the Investments and Securities Act, 2025, the revised MC framework seeks to:
- Enhance the financial soundness and operational resilience of market operators.
- Align capital requirements with the scope, complexity, and risk exposure of regulated activities.
- Promote market stability and systemic risk mitigation.
- Support innovation and orderly development of new market segments, including digital assets and commodities markets.
The revised requirements also reflect the rapid transformation of the capital market, particularly with the rise of digital assets, fintech-driven services, and commodity-based platforms.
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According to the SEC, the revised capital thresholds aim to improve the financial soundness and operational resilience of regulated entities. By aligning capital requirements with the scope, complexity, and risk exposure of each category of operator, the commission seeks to promote a more stable, transparent, and well-capitalized market.
The new framework is also intended to mitigate systemic risks while supporting innovation and the orderly development of emerging market segments, including virtual assets and commodities trading.
The revised minimum capital regime applies to all entities regulated by the SEC. This includes core and non-core capital market operators, market infrastructure institutions, capital market consultants, fintech operators, Virtual Asset Service Providers (VASPs), and commodity market intermediaries.
Entities affected by the new requirements range from brokerage firms, fund and portfolio managers, and issuing houses to exchanges, clearing and settlement companies, robo-advisers, crowdfunding platforms, and digital asset exchanges.
Major Adjustments
Under the new framework, most categories of operators will see significant increases in their capital thresholds compared to the 2015 benchmarks. For example, brokers, dealers, registrars, trustees, and underwriters are now required to maintain substantially higher capital buffers. The minimum capital requirement for brokers (client execution only) has been raised from N200 million to N600 million, while dealers engaged in proprietary trading will now be required to maintain N1 billion, up from N100 million.
Similarly, broker-dealers, who combine client execution, proprietary trading, margin lending, and advisory services, will now need N2 billion, a sharp increase from the previous N300 million. Notably, market infrastructure institutions such as central counterparties, clearing houses, and exchanges also face major increases, reflecting their systemic importance.
The revised framework further introduces specific capital requirements for newer segments of the market, including digital asset platforms, tokenization services, and ancillary virtual asset service providers, areas that previously had no clearly defined thresholds. Digital Asset Exchanges (DAXs) and Digital Asset Custodians must now maintain N2 billion each, compared to the previous N500 million. Also, Real-world asset tokenization platforms will require N1 billion, while ancillary virtual asset service providers must hold at least N300 million.
All affected entities are expected to comply with the revised minimum capital requirements on or before June 30, 2027. The Commission has made it clear that failure to meet the new standards within the stipulated timeframe could attract regulatory sanctions, including suspension or outright withdrawal of registration.
To ease the transition, the SEC has stated that it may consider transitional arrangements on a case-by-case basis, provided there is sufficient justification. Detailed guidance on compliance procedures and capital verification processes will be released separately.
A New Era for Nigeria’s Capital Market
With this move, the SEC is signaling a shift toward a more robust, well-capitalized, and future-ready capital market. The new rules are expected to improve investor confidence, strengthen institutional capacity, and align Nigeria’s market structure with global best practices.
By setting higher entry and operating thresholds, the Commission aims to ensure that only financially sound and operationally capable institutions participate in the market, laying the foundation for long-term stability and sustainable growth.