New thresholds target stronger investor protection, digital assets growth, and market stability
The Securities and Exchange Commission (SEC) has announced a significant increase in minimum capital requirements across all categories of capital market operators (CMOs), in what it describes as a major step toward strengthening Nigeria’s financial markets.
In a circular issued on Friday, the commission said the upward review was driven by the need to enhance market resilience, protect investors, and better align capital requirements with the scale, complexity and risk profile of regulated activities.
According to the SEC, the revised framework is also designed to promote market stability, reduce systemic risk, and support the orderly development of emerging segments such as digital assets, financial technology and commodities trading.
“This circular applies to all entities regulated by the Commission, including core and non-core capital market operators, market infrastructure institutions, capital market consultants, financial technology operators, virtual asset service providers, and commodity market intermediaries,” the SEC said.
Brokers, Fund Managers Face Sharp Capital Increase
Under the new policy, brokerage and fund management services will see some of the most substantial increases in capital requirements.
Brokers engaged solely in client execution will now be required to maintain ₦600 million, up from ₦200 million, while dealers involved in proprietary trading must raise their capital base to ₦1 billion, from ₦100 million previously.
Broker-dealers offering combined services such as execution, margin lending and advisory will need a minimum of ₦2 billion, compared to the former ₦300 million threshold. Inter-dealer brokers will also now be required to maintain ₦2 billion, a steep increase from ₦50 million.
For portfolio and fund management, tier-one portfolio managers handling assets above ₦20 billion must now hold ₦5 billion, up from ₦150 million, while tier-two managers will require ₦2 billion.
The SEC also raised the capital base for private equity fund managers to ₦500 million, while venture capital fund managers will now need ₦200 million.
Issuing Houses, Registrars, Underwriters Affected
Issuing houses will also face higher thresholds, with non-underwriting firms now required to hold ₦2 billion, while firms offering underwriting services must maintain ₦7 billion, up from the previous ₦200 million.
Capital requirements for registrars have been increased to ₦2.5 billion, while rating agencies must now hold ₦500 million, compared to ₦150 million previously.
Under the new framework, trustees are required to maintain ₦2 billion, while underwriters must meet a ₦5 billion capital threshold.
Investment advisers were also affected, with corporate advisers now required to hold between ₦5 million and ₦50 million, while individual advisers must maintain between ₦2 million and ₦10 million, depending on scope of operations.
Digital Assets, Fintechs and Market Infrastructure
The review also extends to market infrastructure institutions, with central counterparties (CCPs) now required to maintain ₦10 billion, clearing and settlement companies ₦5 billion, and composite securities exchanges ₦10 billion.
For the rapidly growing digital asset space, the SEC introduced new capital thresholds. Digital asset exchanges and custodians must now each maintain ₦2 billion, while digital asset offering platforms will require ₦1 billion.
Fintech operators were not left out. Robo-advisers will now need ₦100 million, up from ₦10 million, while crowdfunding intermediaries must maintain ₦200 million, compared to ₦100 million previously.
Commodities, Consultants See Revised Thresholds
In the commodities market, warehousing operators will now be required to maintain up to ₦500 million, while collateral management companies with national or international coverage must hold between ₦500 million, up from ₦50 million.
Capital requirements for capital market consultants were also reviewed upward. Corporate consultants must now hold ₦25 million, individuals ₦2 million, while partnerships will require ₦10 million.
Compliance Deadline Set
The SEC said transitional arrangements may be granted on a case-by-case basis, where justified, and added that detailed guidance on compliance and capital verification procedures will be issued separately.
The commission noted that the circular takes immediate effect, in line with its powers under the Investments and Securities Act, 2025.
All affected entities have been directed to comply with the revised minimum capital requirements on or before June 30, 2027, warning that failure to meet the deadline could result in sanctions, including suspension or withdrawal of registration.
The development follows earlier indications by the SEC that it was preparing to announce an upward review of capital requirements for market operators as part of broader reforms aimed at strengthening Nigeria’s capital market.
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