Tinubu Signals New Robust Capital Market with ISA 2025 Assent

BY BONNY AMADI

With the assent to the Investment and Securities Act (ISA) by Nigerian president, Bola Ahmed Tinubu, the evolution of a new Nigerian capital market has been triggered.

The Securities and Exchange Commission (SEC), weekend announced that, President Ahmed Bola Tinubu, has assented to the Investments and Securities Act (ISA) 2025, which repeals the Investments and Securities Act No. 29 of 2007.

The newly endorsed ISA 2025, by the president, has robust provisions for, Classification of Exchanges, pro visions on Financial Market Infrastructures, Enhances the regulatory powers of the SEC, and Issuance of Securities by Sub-Nationals and their Agencies.

Also, the ISA 2025 has firm provisions for Management of Systemic Risk, Expansion of the Category of Issuers to the Public, Legal Framework for Commodities Exchanges and transparency of securities transactions amongst others.

This landmark legislation endorsed by President Tinubu, amongst other features, strengthens the legal framework of the Nigerian capital market, enhances investor protection, and introduces critical reforms to promote market integrity, transparency, and sustainable growth.

The enactment of the ISA 2025 reaffirms the authority of the SEC as the apex regulatory authority of the Nigerian Capital Market.

The new Act also introduces transformative provisions to further align Nigeria’s market operations with international best practice.

Key highlights of the ISA 2025:

The Act enhances the regulatory powers of the SEC in a manner comparable with benchmark global securities regulators. These enhanced powers and functions ensure full conformity with the requirements of IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), enabling the SEC to retain its “Signatory A” status and enhancing the overall attractiveness of the Nigerian capital market.

Other notable provisions of the ISA 2025 include:

Classification of Exchanges and inclusion of provisions on Financial Market Infrastructures- the Act classifies Securities Exchanges into Composite and Non-composite Exchanges. A Composite Exchange is one in which all categories of securities and products can be listed and traded, while a Non-composite Exchange focuses on a singular type of security or product. There are also new provisions on Financial Market Infrastructures such as Central Counter-Parties, Clearing Houses and Trade Depositories.

Expansion of the definition and Understanding of Securities – The Act explicitly recognises virtual/ digital assets and investment contracts as securities and brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs) and Digital Asset Exchanges under the SEC’s regulatory purview.

Comprehensive Insolvency Provisions for Financial Market Infrastructures – The Act introduces provisions that exempt transactions facilitated through or otherwise involving Financial Market Infrastructures from the application of general insolvency laws.