Nigerian Capital Market Regulatory Framework and SEC Rules
This domain tests whether you can place a fact pattern on the correct rung of the regulatory ladder and name the instrument that governs it.
The statutory layer
The Investments and Securities Act 2025 (ISA 2025) replaced ISA 2007 and is the primary statute. It establishes the Securities and Exchange Commission (SEC) as apex regulator, grants powers to register, supervise, inspect, investigate and sanction, creates the Investments and Securities Tribunal (IST), and defines what counts as a security and a collective investment scheme.
The rule and rulebook layer
Below the Act sit the SEC Rules and Regulations, which carry the detail: registration of capital market operators and sponsored individuals, conduct of business, offers and prospectuses, CIS, custody, AML/CFT and enforcement procedure. SEC amends by rule and supplements by guideline and circular. Self-regulatory organisations - NGX, NASD, FMDQ - issue rulebooks binding on members, but these cannot dilute or contradict SEC rules.
Adjacent regulators
CBN covers banks, payments and foreign exchange; NFIU covers AML reporting; FRC covers accounting and audit oversight; NAICOM and PenCom cover insurance and pensions. Where mandates overlap, the SEC instrument governs capital market conduct.
Worked example
A dealing member plans an app offering fractional shares with wallet funding. Reasoning: fractional dealing is still dealing, so the firm needs broker/dealer registration and its staff need sponsored individual registration covering that function; holding client cash triggers client-asset and custody rules; wallet and payment rails bring CBN into play; tokenised units engage SEC digital asset rules. Launching on the strength of an exchange membership alone is the classic error.
Marks that go missing
Treating the exchange rulebook as the source of SEC obligations; assuming ISA 2007 still governs; thinking a firm licence covers every individual inside it; confusing SEC's investigative powers with CBN's.