President Bora Tinubu has formally agreed to the Investment and Securities Act. In 2024, the previous Investment and Securities Act No. 29 of 2007 was repealed.
This landmark legislation marks an important step in Nigeria’s capital market reform, aiming to improve market integrity, improve investor protection and promote sustainable growth.
The Securities and Exchange Commission (SEC) was confirmed in a statement issued on Saturday, highlighting the changeable provisions of the bill and aligned with global best practices.
Naija News Collected, the new ISA 2024 strengthens the role of the SEC as a capstone regulator responsible for Nigeria’s capital markets. According to the SEC’s statement, the formulation of the law consolidates the SEC’s position and introduces reforms that will help position the Nigerian market in accordance with international standards.
“ISA 2024 reflects our commitment to building a dynamic, inclusive and resilient capital market. By addressing regulatory gaps and introducing forward-looking provisions, this new bill enables the SEC to promote innovation to promote investors and to reposition investors more effectively and reposition them as Nigeria as a destination for local and foreign investment,” said Dr. SEC Director-General Dr. Emomotimi Agama said.
Agama also expressed its gratitude to all stakeholders, including the National Assembly, for their cooperation.
“We commend all stakeholders inside and outside the capital market community for their firm solidarity to achieve this historic milestone. We solicit their ongoing collaboration for the effective implementation of ISA 2024 to benefit our economy.” He added.
The new bill introduces several key reforms aimed at elevating Nigeria’s capital market to global standards. It is worth noting that the bill strengthens the SEC’s regulatory powers to align it with the requirements of the International Securities Commission (IOSCO) and ensures that Nigeria maintains its “signature a” status under the iosco-enhanced multilateral memorandum of understanding (EMMOU).
Some key provisions in ISA 2024 include:
Exchange Classification: This law classifies securities trading into “comprehensive” and “non-compound” categories, with clear differences between exchanges that deal with various securities categories and exchanges that focus on specific types of securities or products.
Contains virtual and digital assets: For the first time, the bill explicitly identifies virtual and digital assets, classifies them as securities. It also brings virtual asset service providers (VASPs), digital asset operators (DAOPSs), and digital asset exchanges into the SEC’s regulatory framework.
Financial Market Infrastructure: The Act introduces provisions related to financial market infrastructure (such as central counters, clearing houses and trade depositors), which are crucial for the smooth operation of the capital market.
Legal Entity Identifier (LEE): Introduces LEE usage by participants in capital market transactions to improve transparency in securities transactions.
Ponzi Scams and Illegal Investment Plans: The Act explicitly prohibits Ponzi Scams and other illegal investment practices, providing for strict penalties from sponsors of such programs, including prison terms.
Focus on commodity exchange and increase fundraising flexibility
Another major highlight of the new ISA 2024 is regulations on commodity exchanges and warehouse receipts. The provision is crucial to the development of Nigeria’s commodity ecosystem, allowing the industry to grow and open up new investment avenues.
The bill also addresses restrictions on raising funds from the capital market through sub-states, providing greater flexibility and making it easier for state and local governments to access capital for development projects.
In addition, the bill includes important amendments to the composition and actions of the courts responsible for handling capital market disputes. These changes are intended to increase the efficiency and effectiveness of the Tribunal in the implementation of its mandate.
Dr. Agama emphasized in his speech that ISA 2024 represents a bold step taken by Nigeria’s capital market.
“We also commend the Finance Minister and Coordination Minister of Nigeria’s Economy and Economics for their valuable contribution to the realization of this groundbreaking project. Their strategic guidance, policy expertise and strong support ensures the consistency of ISA with Nigeria’s broader economic goals in 2024. Agama said.
The new law is expected to bring about a stronger, transparent and competitive Nigerian capital market and bring far-reaching benefits to domestic and international investors.
The SEC assured stakeholders that it will continue to attract market operators, investors and other stakeholders to ensure seamless transition and full implementation of the new legal system.
