President Bola Ahmed Tinubu has signed the Investment and Securities Act (ISA) 2024 into law, marking a significant overhaul of Nigeria’s capital market regulatory framework.
The legislation, which repeals the Investment and Securities Act No. 29 of 2007, aims to strengthen investor protection, improve market transparency, and align the country’s financial markets with global best practices.
The Securities and Exchange Commission (SEC), in a statement on Friday, described the new law as a transformative step that will enhance regulatory oversight, introduce new asset classes, and foster sustainable growth in the capital market. The Commission noted that the enactment reaffirms its authority as the apex regulator and equips it with broader powers to tackle financial misconduct and market instability.
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One of the biggest changes introduced by the ISA 2024 is the expansion of SEC’s regulatory powers to ensure Nigeria meets global standards set by organizations such as the International Organization of Securities Commissions (IOSCO). The SEC emphasized that the new provisions will help Nigeria maintain its “Signatory A” status under IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), which is a critical benchmark for credibility in the global financial landscape.
The law introduces structural reforms and innovations addressing key sectors including stock exchanges, commodities trading, digital assets, and systemic risk management. It also provides a clearer legal framework for financial market infrastructures, such as clearing houses, trade depositories, and central counterparties, which are essential for a stable and efficient capital market.
A key highlight of the Act is the restructuring of stock exchanges, introducing a classification system that differentiates between Composite and Non-composite exchanges. Composite exchanges will be allowed to list and trade all categories of securities and products, while Non-composite exchanges will be limited to specific asset classes. This differentiation is aimed at promoting specialization and enabling better regulatory oversight tailored to the activities of each exchange.
For the first time, Nigeria’s capital market law explicitly recognizes digital assets and investment contracts as securities. Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges will now be subject to SEC regulation. The move is expected to ensure investor protection, increase accountability, and prevent abuses in the fast-growing digital asset sector. With the increasing adoption of cryptocurrencies and blockchain-based investments, this provision brings much-needed clarity and legal backing to digital asset trading in Nigeria.
The Act also introduces a legal framework for commodity exchanges and warehouse receipt systems, a move that is expected to stimulate growth in agriculture, mining, and other commodity-driven industries. The law enables structured financing for commodities and reduces risks for market participants, a development that could boost Nigeria’s agricultural value chain by allowing farmers and commodity traders to access financing while stabilizing prices.
The ISA 2024 grants sub-national governments and their agencies more flexibility in raising funds from the capital market. This reform is expected to open new financing windows for infrastructure development, reducing the reliance of state governments on federal allocations and commercial loans. The Act seeks to enhance economic growth at both state and local government levels by providing states with alternative funding mechanisms.
A crucial aspect of the new law is its crackdown on Ponzi schemes and fraudulent financial activities. It introduces stricter penalties against financial scams, explicitly prohibiting illegal investment schemes and prescribing tougher consequences, including lengthy jail terms for individuals found guilty of promoting fraudulent investments. This provision is a direct response to the proliferation of Ponzi schemes in Nigeria, which have defrauded thousands of citizens of billions of naira. The government’s decision to strengthen enforcement in this regard signals a renewed commitment to cleaning up the investment landscape and protecting retail investors.
To prevent financial shocks from destabilizing the market, the Act introduces special exemptions for transactions processed through key market infrastructures such as clearing houses and central counterparties. These transactions will no longer be affected by general insolvency laws, ensuring market stability in times of financial distress. The SEC is also empowered to monitor and manage systemic risks to prevent disruptions that could arise from financial crises.
The law also expands capital market access by allowing a wider range of entities to issue securities to the public. This provision could lead to increased diversity in financial products available in Nigeria, unlocking new capital-raising opportunities for both the public and private sectors.
To enhance transparency and traceability in capital market transactions, the Act mandates the use of Legal Entity Identifiers (LEIs) for all market participants. LEIs are globally recognized tools that improve fund flow monitoring and help regulators detect irregularities more effectively. This requirement is expected to make Nigeria’s capital market more transparent and reduce the likelihood of fraudulent activities.
The ISA 2024 also strengthens the operations and independence of the Investments and Securities Tribunal, enhancing its capacity to resolve capital market disputes. Changes to the tribunal’s composition, jurisdiction, and appointment process have been introduced to make it more efficient and responsive to the needs of investors.
Reacting to the signing of the Act, SEC Director-General Dr. Emomotimi Agama described it as a milestone that will boost investor confidence and drive capital market development. He stated that the ISA 2024 reflects the SEC’s commitment to building a dynamic, inclusive, and resilient capital market.
“The ISA 2024 reflects our commitment to building a dynamic, inclusive, and resilient capital market,” said Dr. Agama. “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.”
The SEC also acknowledged the National Assembly’s bipartisan support throughout the legislative process. It credited the Minister of Finance and Coordinating Minister of the Economy, as well as the Minister of State for Finance, for their role in shaping the Act to align with Nigeria’s broader economic vision.
The enactment of ISA 2024 is expected to attract renewed interest from both local and international investors, particularly in emerging asset classes such as digital assets and commodities. By strengthening investor protection, increasing market transparency, and introducing stricter penalties for financial crimes, the new law sets the stage for deeper capital formation and economic diversification.
It provides a more level playing field for issuers, exchanges, and operators while giving regulators stronger tools to clamp down on market abuses. Additionally, it presents greater financing opportunities for state governments and businesses.
With this new legal framework, Nigeria takes a bold step toward building a capital market that is more inclusive, innovative, and resilient. The ISA 2024 aligns Nigeria’s capital market with international standards while addressing the country’s unique financial industry. The reforms are expected to position Nigeria as a stronger player in the global investment space, attracting foreign investments and boosting confidence in the country’s economic outlook.