Former president of the Chartered Institute of Bankers of Nigeria (CIBN), Okechukwu Unegbu, has called on the Securities and Exchange Commission (SEC) to reduce the financial burden on Capital Market Operators (CMOs).
Highlighting the growing challenges in Nigeria’s financial sector, Unegbu stressed that excessive charges are forcing many CMOs to shut down, ultimately impacting the country’s capital market ecosystem.
The appeal follows the recent enactment of the Investments and Securities Act (ISA) 2025, signed into law by President Bola Tinubu.
The new legislation replaces the Investments and Securities Act No. 29 of 2007 and aims to bolster the legal framework governing Nigeria’s capital markets.
Designed to enhance investor protection and market transparency, the Act introduces a series of reforms targeted at sustainable growth and systemic stability.
Unegbu’s plea to safeguard CMOs
Unegbu lauded the signing of the ISA 2025, describing it as a significant step forward for the Nigerian capital market. However, he cautioned that CMOs are struggling to remain operational due to high regulatory charges.
Speaking on the issue, he remarked, “The signing of the Act is a good move, and it started well. However, the Nigerian capital market is facing difficulties because you must ask: Why aren’t CMOs making as much money as the banks?
“The commissions they collect are very low, and some cannot fund their activities anymore. Many CMOs are shutting down because of the excessive charges imposed on them. Regulators need to find a way to reduce these charges to ensure sustainability.”
Unegbu also emphasized the importance of enabling CMOs to diversify their revenue streams by participating in a broader range of business activities, ensuring their long-term financial viability.
ISA 2025: Key provisions and transformative reforms
The Investments and Securities Act (ISA) 2025 introduces a host of structural and regulatory innovations aimed at aligning Nigeria’s capital markets with global best practices.
Dr. Emomotimi Agama, Director-General of the SEC, highlighted the Act’s critical reforms, stating that it reaffirms the Commission’s authority as the apex regulator of Nigeria’s capital market.
The new provisions are expected to enhance capital formation, protect investors, and maintain market integrity.
“The Act introduces transformative provisions to further align Nigeria’s market operations with international benchmarks. It enhances the SEC’s regulatory powers to a level comparable with global securities regulators, enabling us to manage systemic risks effectively and bolster investor confidence,” Agama noted.
The enhanced regulatory capabilities also allow the SEC to maintain its “Signatory A” status under the International Organization of Securities Commissions’ (IOSCO) Enhanced Multilateral Memorandum of Understanding (EMMoU), a benchmark for credibility in global markets.
What you should know
- ISA 2025 brings noteworthy reforms that reshape Nigeria’s capital market operations. Among these is the classification of exchanges into Composite and Non-composite categories.
- This classification is designed to provide greater clarity and efficiency in market operations.
- Additionally, the Act introduces a legal framework for regulating critical financial market infrastructures, including clearing houses, trade depositories, and central counterparties. These measures are crucial for ensuring the smooth functioning of Nigeria’s capital markets.
The legislation also addresses the digital asset space, providing long-awaited regulatory clarity by officially recognizing virtual assets and investment contracts as securities.
This development is expected to unlock significant growth opportunities in digital asset trading and innovation.
