The Securities and Exchange Commission (SEC) has announced a sweeping increase in the minimum capital requirements for all Capital Market Operators (CMOs), in a move set to reshape Nigeria’s financial landscape.
The directive, anchored in the Investments and Securities Act 2025, introduces significantly higher thresholds designed to enhance financial resilience and strengthen the integrity of the capital market.
Under the new framework, broker-dealers are now required to raise their capital base to N2 billion, up from the previous N300 million. Meanwhile, leading fund and portfolio managers will need to meet capital requirements of up to N10 billion, depending on their assets under management.
According to the SEC, the revised thresholds are not just about increasing capital but ensuring long-term market stability. The Commission stated that the changes are “intended to promote investor protection, strengthen market integrity, and align Nigeria’s capital market with global regulatory standards.”
The regulator added that the new requirements will foster a more stable and attractive environment for both local and international investors, reinforcing confidence in the financial system.
To ease the transition, the SEC has introduced a phased compliance timeline. While the final deadline is set for June 30, 2027, all CMOs are expected to submit board-approved capitalisation plans by April 30, 2026, detailing their strategies, funding sources, and timelines for compliance.
In a bid to ensure transparency and genuine financial strength, the Commission also tightened the definition of qualifying capital. Only audited financial statements will be recognised, with eligible capital limited to fully paid-up share capital, share premium, and retained earnings. Borrowed funds and revaluation reserves will not be accepted.
For firms that may struggle to meet the new requirements independently, the SEC has approved mergers and acquisitions as alternative pathways, subject to regulatory approval. Companies may also choose to downgrade their licence categories if full compliance is not immediately achievable.
The reforms also extend into the rapidly evolving fintech space. The Commission introduced new capital requirements for exchanges, custodians, and tokenisation platforms, reflecting its growing oversight of digital financial activities.
Market analysts believe the move could trigger consolidation within the sector, similar to previous recapitalisation efforts in Nigeria’s banking industry. By strengthening balance sheets and reducing systemic risks, the SEC says it is taking a decisive step toward building a more resilient and globally competitive capital market.
