The Securities and Exchange Commission(SEC) has directed capital market operators to restrict dealings with financial institutions in North Korea and Iran and apply enhanced due diligence to transactions involving Myanmar.
The directive was contained in a circular to all capital market regulated entities, citing the Financial Action Task Force’s identification of jurisdictions posing significant money laundering, terrorism financing and proliferation financing risks.
Although published on Friday, the circular was dated June 19.
The SEC said the directive was issued under the Investments and Securities Act 2025 and its anti-money laundering, countering financing of terrorism and countering proliferation financing rules and regulations.
For North Korea, the commission directed capital market operators to terminate correspondent banking relationships with financial institutions incorporated in, owned or controlled by persons or entities in the country.
The regulator also instructed operators to ensure that no subsidiaries, branches or representative offices of North Korean financial institutions are established or maintained within their operations.
Capital market operators were further directed to restrict or, where appropriate, refuse business relationships and transactions involving North Korean nationals, entities, government bodies or persons acting on their behalf.
For Iran, the SEC directed operators to refuse to process or facilitate transactions with Iranian financial institutions.
The regulator also instructed operators to decline to establish or maintain subsidiaries, branches or representative offices of Iranian financial institutions in Nigeria.
Capital market operators were further directed to refrain from establishing or operating branches, subsidiaries or representative offices in Iran where deficiencies in the country’s AML/CFT/CPF framework could compromise their compliance obligations.
For Myanmar, the SEC ordered operators to apply enhanced due diligence measures proportionate to the risks associated with the country.
The measures include increasing the frequency, scope and intensity of transaction monitoring for customers, transactions and business relationships connected to Myanmar.
The commission also drew the attention of capital market operators to jurisdictions currently under the FATF’s increased monitoring.
The jurisdictions listed by the SEC are Algeria, Angola, Bolivia, British Virgin Islands, Bulgaria, Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Haiti, Kenya, Lao PDR, Lebanon, Monaco, Namibia, Nepal, South Sudan, Syria, Venezuela, Vietnam and Yemen.
The SEC directed capital market operators to apply appropriate risk-based measures to dealings involving the listed jurisdictions.
The commission also instructed all capital market regulated entities that have not subscribed to Nigeria’s Sanctions, or NigSac, alerts system to do so immediately.
According to the regulator, subscription is mandatory to ensure timely access to terrorist financing and proliferation financing designations and support the effective implementation of Targeted Financial Sanctions.
The SEC further directed operators to promptly report unusual or suspicious transactions to the Nigerian Financial Intelligence Unit.
The regulator said the circular took immediate effect and warned that failure to comply would constitute a violation of the Investments and Securities Act 2025 and the SEC’s AML/CFT rules and regulations.
Violations, it said, would attract appropriate regulatory sanctions, including fines, suspension of operations or revocation of registration.
The directive underscores the regulator’s increased focus on strengthening Nigeria’s capital market defences against money laundering, terrorism financing and proliferation financing risks.
