Nigeria's capital market entered a new era on 25 May 2025, the day President Bola Tinubu signed the Investments and Securities Act 2025 into law. The legislation repeals the Investments and Securities Act 2007, which had governed the market for nearly two decades, and hands the Securities and Exchange Commission (SEC) a substantially expanded mandate. For retail investors, pension holders, stockbrokers, and anyone who trades digital assets, the implications are immediate and material.

This guide breaks down the key provisions, explains what changes for everyday market participants, and sets out the compliance landscape as at June 2026.

What Does the Investments and Securities Act 2025 Actually Change?

The ISA 2025 is a root-and-branch reform, not a light amendment. Its principal interventions fall into five broad areas.

1. Digital assets formally classified as securities

For the first time in Nigerian law, virtual assets and digital asset tokens are expressly recognised as securities. The Act grants SEC the authority to register and regulate Digital Asset Offering Platforms (DAOPs) and Virtual Asset Service Providers (VASPs). This directly addresses the regulatory vacuum that allowed the CBN's February 2021 circular restricting banks from servicing crypto entities to coexist, confusingly, with a market where millions of Nigerians were already trading. As of the first quarter of 2026, Nigeria ranked among the top five countries globally by peer-to-peer crypto volume, according to data from CoinGecko and Chainalysis.

Under the new framework, any platform facilitating the buying, selling, or exchange of digital asset securities must obtain a SEC registration. Operating without registration attracts a minimum administrative penalty of ₦10,000,000 and potential criminal prosecution.

2. Expansion of SEC enforcement powers

The 2007 Act left SEC with limited tools to pursue market infractions. The ISA 2025 corrects this with a dedicated enforcement regime. SEC can now issue interim orders freezing assets without a court application in time-sensitive cases, impose fines of up to 3% of annual turnover on corporate violators, and bar individuals from serving as directors or officers of capital market operators for periods it determines appropriate.

Market manipulation and insider trading carry stiffer penalties under the new law. A conviction for insider trading now attracts a fine of not less than ₦5,000,000 or a term of imprisonment of not less than ten years, or both. The 2007 Act set the minimum fine at ₦1,000,000 and the minimum custodial sentence at five years.

3. Commodities and derivatives brought into scope

The ISA 2025 brings commodity exchanges and derivatives markets under SEC oversight, aligning Nigeria with the regulatory architectures of South Africa (which regulates derivatives through the Financial Sector Conduct Authority) and Kenya (where the Capital Markets Authority covers exchange-traded derivatives). The Nigerian Exchange Group (NGX) reported average daily equities turnover of ₦7.6 billion in the first half of 2025 before the Act was passed; the expectation is that a formalised derivatives market will deepen liquidity further.

The Act mandates the establishment of a Central Counterparty Clearing House (CCP) for derivatives transactions, reducing counterparty credit risk that had been a structural weakness in the OTC market.

4. Investor protection and the Investors' Protection Fund

The Investors' Protection Fund (IPF), which existed in embryonic form under the 2007 framework, is substantially strengthened. Capital market operators must now make annual contributions to the Fund. SEC is empowered to compensate retail investors who suffer losses arising from the default or insolvency of a registered operator, subject to a per-claimant cap to be specified in subsidiary regulations.

Retail investor protection had been a persistent concern. The Securities and Exchange Commission's own enforcement record shows over ₦24 billion in penalties issued between 2019 and 2024, much of it related to Ponzi schemes and unlicensed collective investment schemes that exploited gaps in the 2007 Act.

5. Collective investment schemes and the new registration categories

Fund managers operating collective investment schemes (CIS) must now meet enhanced capital adequacy thresholds. The Act introduces separate registration categories for hedge funds and private equity funds, both of which operated in a grey area previously. Real Estate Investment Trusts (REITs), a vehicle that has grown in importance on the NGX, are given explicit statutory footing with bespoke disclosure obligations.

“The ISA 2025 is the most consequential overhaul of Nigerian capital market law since the Investments and Securities Act 1999. It brings digital assets into the tent, gives SEC real teeth, and creates a consumer-protection architecture that the 2007 Act never had.”

What Does ISA 2025 Mean for Retail Investors in Practice?

The structural changes described above are legislative. What most Nigerians want to know is simpler: how does this affect what I do with my money?

Trading on the Nigerian Exchange

If you trade equities through a stockbroker registered with the NGX and SEC, your day-to-day experience changes modestly in the near term. Your broker is now subject to enhanced conduct-of-business rules, including a requirement to segregate client assets from proprietary assets at all times. This segregation obligation, already standard practice at reputable brokers, is now a statutory requirement with penalties for breach.

The clearing cycle for equities remains T+3 as of June 2026, though SEC has signalled its intention to work with NGX and the Central Securities Clearing System (CSCS) to move towards T+2 in line with international standards. The NGX All-Share Index opened 2026 at approximately 97,400 points, reflecting the market's recovery from the volatility of the 2023-2024 naira devaluation period.

Investing in mutual funds and collective investment schemes

Fund managers are required under the new Act to produce a Key Information Document (KID) for each CIS product, analogous to the Key Investor Information Document used in EU fund regulation. The KID must state fees clearly, including total expense ratios, and must present a standardised risk rating. Investors should begin requesting these documents from their fund managers now, ahead of the mandatory compliance deadline that SEC is expected to gazette in the third quarter of 2026.

Digital asset investors and crypto traders

This is the area where ISA 2025 makes the most transformative intervention. Any platform through which a Nigerian investor buys or sells a digital asset that qualifies as a security under the new definitions must be registered with SEC as a DAOP. The registration process requires the operator to demonstrate technical capacity, maintain a minimum capital base, and appoint a compliance officer.

For investors, this means a registered DAOP will be subject to SEC inspection, customer due diligence rules, and the anti-money laundering framework coordinated with the Central Bank of Nigeria and the Nigerian Financial Intelligence Unit (NFIU). Unregistered platforms remain available but carry elevated risk: if an unregistered operator defaults, the Investors' Protection Fund provides no recourse.

Investors who have been using peer-to-peer channels for stablecoin transactions should be aware that the CBN's stance on direct crypto-to-naira banking access has not been reversed by ISA 2025. The Act governs the securities dimension; the banking dimension remains governed by CBN circulars. These two frameworks operate in parallel.

Tax treatment: what FIRS says

The Federal Inland Revenue Service (FIRS) confirmed in a 2024 guidance note that gains from the disposal of digital assets are subject to Capital Gains Tax (CGT) at the rate of 10% under the Capital Gains Tax Act. The ISA 2025 does not alter the tax position, but the formalisation of digital asset securities means FIRS has a cleaner paper trail through SEC-registered platforms. Investors trading on registered DAOPs should maintain records of acquisition cost and disposal proceeds for each transaction.

For equity investors, dividends remain subject to a 10% withholding tax deducted at source by the company paying the dividend. Capital gains on shares listed on the NGX are exempt from CGT under Section 30 of the Capital Gains Tax Act, a relief that predates ISA 2025 and is unchanged by it.

The Compliance Calendar: Key Dates to Track

SEC has not yet published the full subsidiary regulations that will operationalise every provision of the Act, but the following timelines have been confirmed or signalled as at June 2026.

Existing capital market operators were given a 12-month transition window from the date of assent (25 May 2025) to align their internal structures, capital levels, and documentation with ISA 2025 requirements. This transition window closes on 25 May 2026. As of the date of publication, SEC has not announced a blanket extension, though some operator category deadlines may be staggered through subsidiary instruments.

Digital asset platform operators seeking DAOP registration should note that SEC issued an initial exposure draft of the Digital Asset Rules in late 2025 and is expected to finalise those rules before the end of the second quarter of 2026. Until finalised rules are gazetted, existing operators may continue under the Accelerated Regulatory Incubation Programme (ARIP) framework that SEC established in 2022.

For a broader view of the tax obligations that apply across asset classes, see the Nigerian investor tax overview.

What Investors Should Do Now

The ISA 2025 is not a passive development. It creates new rights and new obligations simultaneously. Retail investors should take the following steps.

First, verify that every platform through which you invest is currently registered with SEC. The SEC Nigeria website maintains a public register of licensed operators. If a platform does not appear on that register, it operates outside the statutory protection framework.

Second, review your fund manager's disclosure documents. As KID requirements bed in, any fund manager who cannot produce clear fee and risk disclosure should be treated with caution.

Third, maintain transaction records for all digital asset activity. Regardless of whether a platform is SEC-registered, FIRS expects you to self-assess CGT on taxable disposals. Records of naira cost at acquisition and naira value at disposal are essential for accurate computation.

Fourth, watch the SEC gazette. Subsidiary regulations under ISA 2025 will determine the granular compliance requirements, the IPF contribution rates, and the precise definitions of which digital assets fall within the securities perimeter. Investors and operators alike should monitor the SEC Nigeria website and the Federal Government's Official Gazette.

Regulatory note: This article is produced for informational purposes by The Cowrie Newsroom. It does not constitute financial, legal, or investment advice. The Investments and Securities Act 2025 is administered by the Securities and Exchange Commission Nigeria; queries about specific registration obligations should be directed to SEC. The Central Bank of Nigeria retains jurisdiction over foreign exchange and payment system matters. The Federal Inland Revenue Service governs all tax obligations. The Cowrie is an independent editorial publication and holds no financial services licence issued by SEC, CBN, or any other Nigerian regulatory authority.

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