Capital market infrastructure, the Central Securities Clearing System Plc, has said that the expansion of recognised asset classes in the Investment and Securities Act 2025 was a major boon to the capital market.
This was disclosed by the Head of Treasury and Investments at CSCS Plc, Akinwonuola Atitebi, on Saturday during a panel discussion at the annual conference of the Capital Market Correspondents Association of Nigeria held under the theme, ‘Regulatory Reforms: ISA 2025 and Investment Climate.’
President Bola Tinubu earlier this year assented to the ISA, which recognised digital assets, including cryptocurrencies, in the country. The ISA 2025 has also made it illegal to operate digital asset exchanges or online foreign exchange trading platforms without formal registration with the Securities and Exchange Commission.
Speaking on the significance of the law, Atitebi emphasised that markets evolve over time, and ISA 2025 reflects developments seen in the last 10 to 20 years. “Today’s markets are different from those of a decade ago. This act brings everything together and, importantly for CSCS, includes additional asset classes that were previously unregulated,” he said.
Atitebi highlighted that the inclusion of cryptocurrencies and other digital assets represents “an area of immense opportunity. CSCS, in terms of what we do as a financial market infrastructure, started investing already in infrastructural power to support trading in those sorts of asset classes in the future.”
He went on to commend the SEC and other stakeholders, including the Ministry of Finance, for their efforts in putting together the robust legislation while offering the full support of the CSCS for the full implementation of the ISA 2025.
“Thank you to everybody for the work that was put in and for the achievement. But going forward, it’s one thing to have a near-perfect act, a near-perfect document, a near-perfect framework, a legal framework that addresses all our issues and all gaps. It’s another thing to execute. The SEC leadership that we have today really has the capacity. They have demonstrated it in certain things that they’ve done. But we, as partners in the market, need to support them. CSCS is committed, fully aligned with SEC’s goals, and I can say that on behalf of the board and management of CSCS, we will stand by to assist in any way required to fully implement ISA 2025,” he said.
Speaking further on the provisions of the law, Atitebi said, the law also incorporated proactive compliance measures that aim to curb market abuses.
Atitebi cited the prohibition of cash transactions in capital markets and the requirement that all securities must be dematerialised before trading on secondary markets as examples, saying, “One thing that we gave the SEC a big plus point was the proactiveness in a lot of the provisions regarding compliance. I think if implemented properly, a lot of the abuses we’ve seen in the past will not even come up. So you look at one particular thing where you ban cash transactions completely from capital markets.
“That immediately takes out the role of money laundering and issues at the end of the night. And I think now there is a rule that all securities must be dematerialised before they can be traded on the secondary market. Right? What that does is it immediately eliminates a lot of avenues for abuse and issues. You are cleaning up the capital markets. Just by having those provisions in the ISA 2025. So, again, if this act is implemented, and we also support that, a lot of what you guys see as down the line, hard-nosed enforcement possibilities will not even arise. Because it’s the proactiveness and the preventive practices that are embedded in that act.”
With the ISA 2025 now in force, Nigerian capital markets are poised to embrace digital transformation while offering investors access to a broader range of investment opportunities.
Recall that the CSCS Plc last month championed the transition of Nigeria’s capital market to the T+2 settlement cycle, bringing the market in step with global peers.
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