SEC orders capital market operators to sign up for NigSac alerts, freeze terrorists-linked funds

The Securities and Exchange Commission (SEC) has issued an urgent directive requiring all capital market-regulated entities (CMREs) to immediately subscribe to Nigeria’s Sanctions (NigSac) Alerts system.

This follows fresh designations by both local and international authorities of individuals and Bureau de Change operators for alleged direct involvement in terrorism financing and material support to the Islamic State West Africa Province (ISWAP).

The directive, according to three circulars issued by the apex capital market regulator, requires a mandatory compliance measure with threats of fines, operational suspension, or outright registration revocation for non-compliance.

The directive, pursuant to the implementation of Financial Action Task Force (FATF) statements on high-risk jurisdictions, signals an escalation in Nigeria’s anti-money laundering and counter-terrorism financing regime.

This comes at a time when domestic and international authorities have moved to designate fresh terrorism financiers with Nigerian connections after the US government action naming Nigerian citizens and six Nigerian firms involved in facilitating financial flows linked to the Islamic State of West African Province (ISWAP).

What SEC is saying:

The SEC’s broader circular implementing FATF high-risk jurisdiction statements reflects Nigeria’s heightened exposure to international scrutiny. SEC, in line with directives from Central Bank of Nigeria (CBN), now requires CMREs to terminate all correspondent banking relationships with listed high-risk jurisdictions, business entities and individuals.

• “In line with the provisions of the Terrorism Prevention and Prohibition Act (TPPA), 2022, the Nigeria Sanctions Committee (NSC) has designated six (6) Individuals and three (3) Entities as terrorist financiers and subsequently added them to the Nigeria Sanctions List,” SEC stated in circular to all market operators.

The circular mandated all capital market regulated entities and individuals to do the following:

• “Immediately, identify and freeze, without prior notice, all funds, assets, and any other economic resources belonging to the designated persons and entities in their possession and report same to the Secretariat of the Nigeria Sanctions Committee;
• “Report to the Secretariat of the Nigeria Sanctions Committee any assets frozen or actions taken in compliance with the designation, including attempted transactions;
• “Immediately file a suspicious transactions report to the Nigerian Financial Intelligence Unit (NFIU) for further analysis on the financial activities;
• “Report as a suspicious transactions report to the NFIU, all cases of name matching in financial transactions prior to or after receipt of this Sanctions List;
• “Subsequently prohibit dealings with the designated persons and entities; and continue to check for transactions relating to the designated persons and entities and report findings to the Nigeria Sanctions Committee through info@nigsac.gov.ng”, SEC stated.
• “Take Note that at all times, any unusual or suspicious transactions shall be promptly reported to the NFIU,” SEC warned.

According to the capital market apex regulator, the circular takes immediate effect and failure to comply with the directives constitutes a violation of the Investments and Securities Act, 2025, and the SEC AML/CFT Rules and Regulations and such failure would attract appropriate regulatory sanctions, including fines, suspension of operations, or revocation of registration.

More insights:

The directive implies that capital market operators should immediately audit their AML/CFT technology stacks to ensure NigSac Alerts subscription and automated flagging capability.

• CMREs are required to file suspicious transactions reports with the Nigerian Financial Intelligence Unit (NFIU) for any name matching with designated individuals and entities, whether such matches occur pre- or post-transaction.
• The obligation extends to reporting all funds frozen and actions taken in compliance with designations to the NSC Secretariat via info@nigsac.gov.ng.
• The designations also create secondary compliance obligations: CMREs must now maintain watchlists that incorporate designations from both the NSC and US Treasury, as regulatory expectations implicitly track international sanctions coordination.

For institutional investors and fund managers, this translates to enhanced due diligence on counterparty relationships, particularly where transactions flow through informal financial infrastructure or jurisdictions flagged under FATF increased monitoring status.

Get up to speed:

SEC also mandated enhanced monitoring of relationships tied to 20 jurisdictions currently under increased FATF monitoring, as well as individuals designated as terror financiers.

• These include Democratic People’s Republic of Korea (DPRK) and all financial institutions therein.
• SEC also mandated market operators to: refuse transactions with Iranian financial entities.
• Apply enhanced due diligence to Myanmar-linked businesses.
• Maintain enhanced monitoring of relationships tied to any jurisdiction under increased FATF monitoring—including Venezuela, Lebanon, Lao PDR, and South Sudan.
• Freeze accounts and reject all transactions linked to six individuals and three Nigerian entities flagged by the Nigeria Sanctions Committee (NSC) for terrorism financing.

The timing underscores a coordinated tightening of surveillance around capital market gateways through which illicit funds might flow. According to the SEC’s mandate, CMREs that have not subscribed to NigSac Alerts face immediate compliance orders.

What you should know:

The NSC’s June 2026 designations paint a picture of an entrenched financing infrastructure centred on Bureau de Change operators and informal financial networks.

• Six individuals designated for direct involvement in terrorism financing and material support to the Islamic State West Africa Province (ISWAP) suggest a fresh addition to the list of individuals after the April 13, 2026 list.
• The SEC’s June 18 designations identified Babangida Muhammed Adamu Hammajam, Abdullahi Umar Usman, and Ibrahim Abubakar for links to ISWAP.
• It also identified Adamu Chiroma for using Bureau de Change entities to move terrorist-linked funds.
• It identified Muktar Muhammad Adamu for facilitating ISWAP Okene cell transactions; and Yakubu Ogirima Ibrahim for supporting the ISWAP Kogi cell.
• BDC entities were also designated on the June 15 circular, including Nine to Nine BDC Ltd, Generation Currency BDC Ltd, and Abbal Bako & Sons Bureau de Change for their role in channelling funds through the ISWAP Okene financing network.
• These designations were subsequently echoed in US Treasury action on June 26, which added Mukhtar Adamu Muhammad (also known as Muhammad Mukhtar and Mukhtar Adamu), Generation Currency Bureau de Change Limited, Manhattan Bureau de Change Limited, and Nine to Nine Exchange Bureau de Change Limited to America’s sanctions register for ISIS-related financial facilitation.
• The designation cluster suggests that informal financial corridors—particularly those serviced by BDC operators—remain primary vectors for terrorism financing flows within Nigeria’s financial ecosystem.

Capital market operators, though ostensibly downstream from BDC activity, are now mandated to treat NigSac alerts as operational intelligence with the same weight as formal compliance directives.

The alerts system provides timely access to terrorist financing and proliferation financing designations and supports implementation of Targeted Financial Sanctions (TFS)—a framework now deemed non-negotiable for market operators navigating heightened regulatory expectations around beneficial ownership verification and transaction monitoring.