President Bola Tinubu’s assent to the Investments and Securities Act 2024 is set to strengthen Nigeria’s capital market and boost investor confidence
In a significant move aimed at strengthening Nigeria’s capital market, President Bola Tinubu has granted presidential assent to the Investments and Securities Bill.
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The new Investments and Securities Act 2024 (ISA 2024) repeals the previous Investments and Securities Act of 2007, introducing key reforms designed to enhance market oversight, foster investor confidence, and align Nigeria’s financial market with global best practices.
The Securities and Exchange Commission (SEC) of Nigeria issued a statement announcing the approval, highlighting that the ISA 2024 is a vital step forward in creating a more dynamic and resilient capital market.
Dr. Emomotimi Agama, the Director-General of the SEC, commended the president for his leadership and described the new Act as a transformative step for the country’s financial system.
“The ISA 2024 reflects our commitment to building a dynamic, inclusive, and resilient capital market. By addressing regulatory gaps and introducing forward-looking provisions, the new Act empowers the SEC to foster innovation, protect investors more efficiently, and reposition Nigeria as a competitive destination for both local and foreign investments,” Dr. Agama stated.
One of the most notable changes in the new Act is the formal recognition of virtual assets, such as cryptocurrencies, as securities.
This brings digital assets under the regulatory supervision of the SEC, ensuring that digital asset operators, exchanges, and service providers comply with the same investor protection standards as traditional securities.
Other important reforms in the ISA 2024 include:
– **Expanded definition of securities**: The Act now includes investment contracts, ensuring broader coverage for various financial instruments and assets.
– **Stricter regulatory measures**: The Act strengthens provisions to combat fraudulent investment schemes, including Ponzi schemes, with harsher penalties and longer jail terms for perpetrators.
– **Classification of securities exchanges**: Exchanges are now classified into Composite and Non-Composite Exchanges. The former allows trading in all categories of securities, while the latter focuses on specific financial instruments.
– **Enhanced enforcement powers for the SEC**: The Act gives the SEC stronger regulatory authority, aligning Nigeria’s capital market with global standards set by the International Organization of Securities Commissions (IOSCO).
Market analysts have hailed the introduction of the ISA 2024 as a crucial development that will provide greater clarity for investors, boost market integrity, and open new investment opportunities.
Provisions for commodities exchanges, warehouse receipts, and new categories of issuers are expected to stimulate economic growth and attract both domestic and international investments.
The SEC has assured stakeholders that the transition from the old ISA 2007 to the new Act will be seamless, with plans for consultations and engagements to ensure effective implementation.
“This development is expected to enhance market integrity, improve risk management practices, and bolster investor confidence in Nigeria’s financial sector. With the right regulatory framework in place, Nigeria is now poised for sustained growth in its capital market,” said Dr. Agama.
The SEC also expressed its appreciation to the National Assembly for its dedication to enacting the ISA 2024, acknowledging their thorough deliberations, stakeholder consultations, and bipartisan support throughout the legislative process.
The contributions of Nigeria’s Minister of Finance and Coordinating Minister of the Economy were also praised for their strategic guidance in ensuring that the new Act aligns with the country’s broader economic objectives.
With the ISA 2024 now in force, Nigeria’s capital market is set to be a more competitive, transparent, and secure environment for investment, paving the way for sustainable economic growth in the years to come.
