The Securities and Exchange Commission (SEC) has announced that His Excellency, President Ahmed Bola Tinubu GCFR, has granted assent to the Investments and Securities Act (ISA) 2024, a landmark legislation designed to fortify Nigeria’s capital market, enhance investor protection, and drive sustainable economic growth. This new Act repeals the Investments and Securities Act No. 29 of 2007, ushering in a modernized legal framework aligned with international best practices.
Strengthening Market Integrity and Investor Confidence
The enactment of ISA 2024 reaffirms the SEC’s role as the apex regulatory authority for the Nigerian capital market. The new law grants the Commission enhanced regulatory powers, comparable to leading global securities regulators, ensuring Nigeria remains compliant with the International Organization of Securities Commissions’ (IOSCO) Enhanced Multilateral Memorandum of Understanding (EMMoU). This will bolster the credibility and attractiveness of Nigeria’s capital market to domestic and international investors.
Key Highlights of ISA 2024
- Classification of Exchanges and Financial Market Infrastructures: The Act distinguishes between Composite and Non-composite Securities Exchanges and includes new regulations for Central Counter Parties, Clearing Houses, and Trade Depositories.
- Recognition of Digital Assets as Securities: Virtual/digital assets and investment contracts now fall under SEC’s regulatory oversight, ensuring Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges operate within a structured framework.
- Comprehensive Insolvency Provisions: Transactions facilitated through Financial Market Infrastructures are now exempt from general insolvency laws, safeguarding market stability.
- Systemic Risk Management: Provisions for identifying, managing, and mitigating systemic risks have been introduced to ensure market resilience.
- Expansion of Issuer Categories: More entities can now raise capital through the market, fostering business expansion and innovation.
- Regulation of Commodities Exchanges: A dedicated legal framework now governs Commodities Exchanges and Warehouse Receipts, facilitating a robust commodities ecosystem.
- Flexibility for Sub-Nationals to Raise Funds: Sub-national governments and their agencies now have fewer restrictions on capital market financing.
- Mandatory Use of Legal Entity Identifiers (LEIs): Transparency in securities transactions is improved through compulsory LEI implementation.
- Crackdown on Illegal Investment Schemes: Ponzi schemes and fraudulent investment activities are explicitly outlawed, with stringent penalties for offenders.
- Enhanced Investments and Securities Tribunal: Reforms in the Tribunal’s composition and jurisdiction ensure a more efficient dispute resolution mechanism.
SEC Commends Presidential Assent, Pledges Effective Implementation
Commenting on this milestone, SEC Director-General, Dr. Emomotimi Agama, hailed the Act as a game-changer for Nigeria’s capital market. He stated, “The ISA 2024 is a testament to our dedication to fostering a resilient and inclusive capital market. With enhanced regulatory powers and forward-looking provisions, we are poised to safeguard investors, promote innovation, and position Nigeria as a prime destination for investment. We deeply appreciate all stakeholders who contributed to this historic achievement and urge their continued collaboration for effective implementation.”
The SEC expressed gratitude to the National Assembly for its commitment to enacting a robust legal framework, highlighting the bipartisan support and extensive stakeholder consultations that shaped the legislation. The Commission also acknowledged the vital role played by the Honourable Minister of Finance and Coordinating Minister of the Economy, alongside the Minister of State for Finance, in aligning ISA 2024 with Nigeria’s broader economic objectives.
Next Steps: A Seamless Transition to ISA 2024
As Nigeria transitions from the repealed ISA 2007 to the newly established ISA 2024, the SEC will engage actively with market operators, investors, and all relevant stakeholders to ensure smooth implementation. The Commission remains committed to fostering a transparent, secure, and globally competitive capital market that will drive national economic growth and prosperity.
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