Professor of Capital Market and Director, Institute of Capital Market Studies, Nasarawa State University Keffi, Uche Uwaleke, has said that the Investment and Securities Act 2025, will not only modernize Nigeria’s Capital Market, it will also enhance the Securities and Exchange Commission’s regulatory powers.
In a presentation at the ISA 2025 sensitization workshop organized by the ICMS in collaboration with Capital Market Academics of Nigeria (CMAN), Saturday in Abuja, Prof, Uwalake said, in addition, the new Act will further enhance coordination of inter-agency frameworks, ensure adequate resourcing of the Securities and Exchange Commission, as well as strengthen active stakeholder engagement with investors, tech firms, market operators, and Capital Market Academics.
He said, “ISA 2025 represents a significant step forward in modernizing Nigeria’s capital market framework, enhancing regulatory oversight, and providing robust investor protection.”
The Act prescribes more stringent measures against fraudulent schemes empowering the SEC to prosecute Ponzi scheme operators, with penalties including 10-year prison sentences and fines of not less than ₦20 million.
“It also allows the SEC to recover profits gained through fraudulent activities, ensuring restitution for affected investors (Section 192).
“The Act allows the Investor Protection Fund (IPF), established by securities exchanges, to cover investor losses linked to the deregistration of brokerage firms, extending beyond the current coverage of bankruptcy or negligence cases. (Section) 193.
The new provisions expand the Commission’s surveillance capability with access to critical data and the ability to track illegal activity and enforce compliance,” he explained.
Section 26 of the Act broadens the scope and definition of securities to include virtual and digital assets such as cryptocurrencies and investment contracts. This classification brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under SEC’s regulatory oversight, ensuring transparency and investor protection in the digital asset space.
The Act also strengthens the Investment and Securities Tribunal by giving it exclusive jurisdiction to adjudicate on disputes arising from investments and securities transactions in Nigeria. According to the Act, the Tribunal shall conduct its proceedings in such a manner as to avoid undue delays and shall dispose of any matter before it finally within three monthsfrom the date of the commencement of the hearing of the substantive action.
In order to address some of the regulatory lapses that may arise for carrying out its function, the first Professor of the Nigerian Capital Market called for a harmonized regulatory framework for fintech, possibly through a dedicated Fintech Regulatory Sandbox codified in law. According to him, a cross-agency committee, chaired by the SEC DG should be granted legal authority to establish and manage the sandbox setting out governance structures, including inter-agency collaboration.
He also called for “Bilateral or multilateral memoranda of understanding (MoUs) with international regulators to manage cross-border fraud, digital trading, and compliance. Enforce geo-fencing for unregistered foreign platforms: requiring foreign apps to register locally before offering services; Geo-block URLs by ordering ISPs to block access to the websites and apps of non-compliant platforms inside Nigeria; App store control requesting Google Play and Apple App Store to restrict downloads of specific apps within Nigerian territory; and Direct banks, card networks, and payment processors (like Flutterwave, Paystack, etc.) to stop processing transactions related to banned platforms,” he further explained.