Tinubu Enacts Investments and Securities Act 2025

President Bola Tinubu recently signed the Investments and Securities Act (ISA) 2025 into law, which replaces the previous Investments and Securities Act No. 29 of 2007. The new Act solidifies the role of the Securities and Exchange Commission (SEC) as the primary regulatory body for the Nigerian capital market and introduces provisions to bring the operations of the market in line with global best practices.

By signing the ISA 2025 into law, President Tinubu has taken a significant step towards strengthening the legal framework of the Nigerian capital market. The new Act aims to enhance investor protection, promote market integrity, transparency, and sustainable growth. Mr Emomotimi Agama, the Director-General of the SEC, commended the President’s approval as a transformative move that will pave the way for a more inclusive and resilient capital market in Nigeria.

One of the key highlights of the ISA 2025 is the empowerment of the SEC with enhanced regulatory powers, aligning them more closely with leading global securities regulators. This alignment ensures that the SEC retains its Signatory A status under the requirements of IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), thereby bolstering the attractiveness of the Nigerian capital market.

The new Act introduces several notable provisions, including the classification of Securities Exchanges into Composite and Non-composite Exchanges. Additionally, there are new provisions governing Financial Market Infrastructures like Central Counter Parties, Clearing Houses, and Trade Depositories. The ISA 2025 also expands the definition of securities to include virtual/digital assets and investment contracts, bringing virtual asset service providers, digital asset operators, and digital asset exchanges under the regulatory oversight of the SEC.

Furthermore, the ISA 2025 introduces comprehensive insolvency provisions for Financial Market Infrastructures, exempting transactions involving these entities from general insolvency laws. The Act also addresses the monitoring, management, and mitigation of systemic risk in the Nigerian capital market, among other key provisions focused on promoting transparency, innovation, and growth in the market.

The ISA 2025 expands the categories of issuers allowed to raise funds in the capital market, facilitates the regulation of Commodities Exchanges and Warehouse Receipts, and introduces transparency measures such as the mandatory use of Legal Entity Identifiers (LEIs) in capital market transactions. Additionally, the Act cracks down on illegal investment schemes, explicitly prohibiting Ponzi schemes, and other unlawful activities with stringent penalties for offenders.

In conclusion, the enactment of the Investments and Securities Act 2025 marks a significant milestone in the development of the Nigerian capital market. By bolstering regulatory oversight, enhancing investor protection, and introducing transformative provisions, the ISA 2025 is poised to strengthen the market’s integrity, transparency, and attractiveness to both local and foreign investors. It is crucial for all stakeholders to collaborate effectively in implementing the new Act to realize its full potential for the benefit of the Nigerian economy.