In a landmark move to enhance Nigeria’s financial sector, President Bola Ahmed Tinubu has signed the Investments and Securities Bill 2024 into law, replacing the Investments and Securities Act 2007. The newly enacted law is set to fortify regulatory oversight, boost investor confidence, and align the nation’s capital market with global best practices.
A statement issued by the Securities and Exchange Commission (SEC) on Saturday confirmed the President’s assent to the bill, describing it as a game changer for the financial sector. The Director General of the SEC, Dr. Emomotimi Agama, hailed the enactment as a transformative development that will reposition Nigeria as a prime destination for local and foreign investments.
“The Investments and Securities Act 2024 is a strategic step towards modernizing our capital market. It provides an improved regulatory framework, strengthens investor protection mechanisms, and fosters innovation,” Agama stated. He further commended all stakeholders for their contributions towards the bill’s realization and called for collective efforts in ensuring its successful implementation.
The newly signed Act introduces several groundbreaking provisions, including the formal recognition of virtual assets such as cryptocurrencies as securities, bringing them under the regulatory purview of the SEC. This move aims to promote transparency and investor protection in Nigeria’s evolving digital asset space.
Additionally, the law broadens the definition of securities to include investment contracts, ensuring that digital asset operators, exchanges, and service providers adhere to investor protection regulations. It also categorizes securities exchanges into Composite and Non-Composite Exchanges, with the former encompassing all securities while the latter is limited to specific financial instruments.
The Act also implements stringent measures to combat Ponzi schemes, prescribing severe penalties, including jail terms, for individuals and entities found guilty of promoting fraudulent investment programs.
Boosting Market Integrity and Global Compliance
To strengthen Nigeria’s financial standing, the Act enhances the SEC’s enforcement powers and aligns the country’s regulatory framework with international standards, particularly those set by the International Organization of Securities Commissions (IOSCO). Market analysts have lauded this as a crucial step in increasing Nigeria’s attractiveness to investors and fostering economic growth.
Experts believe the law will introduce greater clarity for investors, facilitate the expansion of commodities exchanges, and improve access to investment opportunities through warehouse receipts and new categories of issuers.
Seamless Transition and Future Prospects
The SEC has assured market participants of a smooth transition from the repealed ISA 2007 to the new regulatory structure, with planned stakeholder engagements to ensure effective implementation.
The Commission also expressed gratitude to the National Assembly for its commitment to strengthening the capital market through extensive legislative deliberations and bipartisan support. Furthermore, appreciation was extended to the Minister of Finance and Coordinating Minister of the Economy, as well as the Minister of State for Finance, for their crucial roles in shaping the new legal framework.
With the enactment of the ISA 2024, Nigeria’s financial markets are poised for significant expansion, fostering greater investor confidence, enhancing market integrity, and ensuring a more resilient economic landscape in the years to come.
