The Nigeria’s capital market just got a major makeover. With the signing of the Investment and Securities Act (ISA) 2025 by President Bola Tinubu, we are entering a pivotal new era of reform designed to boost investor confidence, strengthen regulation, and make room for innovation, particularly in the area of digital finance. This comprehensive new law replaces the outdated 2007 Act and is equipped with substantial updates that address the challenges of today’s market realities. 

Here’s what you should know about it and why it’s significant.
Strengthening the regulatory powers of the securities and exchange commission (SEC)
The Securities and Exchange Commission (SEC) isn’t just observing anymore; it’s taking action. The new law empowers the SEC with expanded authority over participants in capital markets, including those operating the rapidly changing digital asset space. Think of it as giving the regulator the necessary tools to crack down on shady operators, protect your investments, and ensure Nigeria aligns with global standards set by organisations like the International Organisation of Securities Commissions (IOSCO).

Classification of Securities Exchanges: The Act introduces a more structured approach to securities exchanges, categorising them into two types: Composite exchanges, which handle all kinds of securities, and Non-composite exchanges, which focus on specific areas like commodities or derivatives. Why is this important? This classification helps to create a more organised market, enabling investors to better comprehend where their money is being directed, while also granting regulators increased oversight.

Criminalising Ponzi Schemes and Unlawful Investment Practices: With this significant development, a clear legal distinction has now been established: Ponzi schemes and fraudulent investment platforms are officially classified as criminal offenses. Those found guilty could face serious repercussions, including imprisonment, substantial fines, or both. This marks a crucial victory for investor protection in a nation that has witnessed far too many individuals succumbing to enticing but deceptive schemes.

Recognition and Regulation of Digital Assets and Virtual Asset Service Providers (VASPs): The ISA 2025 has officially embraced digital and virtual assets within the formal financial system. Operators engaging in crypto and other blockchain assets are now required to register with the SEC. This move not only helps eliminate fraudsters but also demonstrates Nigeria’s readiness to participate in the global dialogue on digital finance. For innovators in the FinTech sector, this is a significant development.

Access to Telecommunication and Electronic Communication Data: To enforce the law effectively, the SEC now has the authority to access relevant data from telecom and electronic communication companies. This means they can obtain information related to calls, internet activity, and digital transactions, but only for investigative purposes. This marks a significant advancement toward more efficient and intelligent enforcement.

Systemic risk management and market stability: We’ve observed the significant impact that market instability can have on investor confidence. To address this issue proactively, the SEC has the authority to take preventive measures, such as requesting sensitive documents or even suspending trading to mitigate systemic risks before they escalate into full-blown crises. These powers not only enhance Nigeria’s ability to manage market fluctuations but also align it more closely with global standards for financial stability and crisis prevention.

Regulatory provisions for financial market infrastructures: Entities such as clearing houses and central depositories now benefit from a well-defined regulatory framework. To legally operate, they are required to register with the SEC. The Commission holds the authority to revoke these approvals if investors face potential risks; however, this action can only be taken after providing the entities with a fair opportunity to present their case.

Comprehensive insolvency provisions for financial market infrastructures: The new Act protects key market transactions from being tangled up in insolvency proceedings. In short: if a financial market infrastructure is involved, their transactions take priority. This measure ensures that investor funds and obligations remain secure and are not held up in legal limbo.

Expansion of the category of issuers to the public:  Exciting news for businesses and start-ups: the regulatory framework for who can issue securities to the public is widening. This now includes innovative tools such as crowdfunding, pending SEC approval. This marks a significant move towards democratising finance and fostering innovation.

Regulation of commodities exchanges and warehouse receipts: Commodity exchanges, brokers, and warehouses are now required to register with the SEC, or they risk facing significant penalties. Even the use of terms like “Clearing House” or “Commodity Exchange” without proper registration can lead to fines. Furthermore, only registered entities may use titles such as Commodity Exchange, Clearing House, Broker, or Trading Adviser, with unauthorised use incurring a N10 million fine, plus N20, 000 per day for continued violations. The objective of these regulations is to ensure market order and protection for all participants involved.

Mandatory use of legal entity identifiers: All participants are now required to have a Legal Entity Identifier (LEI), a globally recognised ID code that enhances transparency and facilitates tracking of fund flows. Think of it as a financial fingerprint, which helps to easily identify any irregularities.

Avenue for sub-national fundraising: Sub-national governments, including states and local government areas (LGAs), can now tap into capital markets to finance public projects, such as roads, hospitals, and schools, without relying solely on federal allocations or commercial loans. This change paves the way for more intelligent, localised approaches to development financing.

Final thoughts: A future-ready capital market
The Investment and Securities Act 2025 isn’t merely a new regulation; it represents a significant advancement toward creating a capital market that is smarter, safer, and more inclusive. For investors, entrepreneurs, and regulators alike, this Act marks a pivotal moment, emphasising transparency, fostering innovation, and strengthening enforcement measures. 

It falls on all stakeholders to breathe life into this law, ensuring that Nigeria’s capital market evolves into a shining example for both local and international investors.
Ezekiel is the Managing Partner, Olisa Agbakoba Legal (OAL).