Tinubu Signs Investments And Securities Act 2024 Into Law.
President Bola Tinubu has signed the Investments and Securities Act (ISA) 2024 into law, repealing the previous Investments and Securities Act No. 29 of 2007. This new legislation strengthens Nigeria’s capital market, enhances investor protection, and introduces key reforms to promote transparency, integrity, and sustainable growth.
The Securities and Exchange Commission (SEC) announced the development in a statement on Saturday, reaffirming its role as the apex regulator of Nigeria’s capital market. The Act aligns the country’s market operations with international best practices, positioning it as a more competitive destination for local and foreign investments.
Commenting on the new law, SEC Director-General Dr Emomotimi Agama hailed it as a transformative step for the capital market.
“The ISA 2024 reflects our commitment to building a dynamic, inclusive, and resilient capital market. By addressing regulatory gaps and introducing forward-looking provisions, the new Act empowers SEC to foster innovation, protect investors more efficiently, and reposition Nigeria as a competitive investment hub,” he said.
The Act grants SEC enhanced regulatory powers comparable to global benchmark securities regulators. It ensures compliance with the International Organization of Securities Commissions’ (IOSCO) Enhanced Multilateral Memorandum of Understanding (EMMoU), allowing SEC to retain its “Signatory A” status and boosting the market’s attractiveness.
Key Provisions of the ISA 2024
– Classification of Exchanges: The Act differentiates between Composite Exchanges, which list and trade all types of securities, and Non-composite Exchanges, which focus on specific securities or products.
– Financial Market Infrastructure: It introduces regulations for Central Counter Parties, Clearing Houses, and Trade Depositories.
– Regulation of Digital Assets: The Act recognises virtual/digital assets as securities, bringing Virtual Asset Service Providers (VASPs) and Digital Asset Operators (DAOPs) under SEC’s supervision.
– Systemic Risk Management: It mandates measures for monitoring, managing, and mitigating risks in the capital market.
– Expansion of Issuers and Investment Products: The law allows for a broader range of securities offerings and investment business activities, subject to SEC approval.
– Regulation of Commodities Exchanges: The Act provides a framework for Commodities Exchanges and Warehouse Receipts, fostering the growth of Nigeria’s commodities market.
– Capital Raising Flexibility: It relaxes restrictions on sub-nationals raising funds from the capital market, increasing financial flexibility.
– Transparency and Investor Protection: The mandatory use of Legal Entity Identifiers (LEIs) in transactions enhances market transparency.
– Prohibition of Ponzi Schemes: The Act expressly bans Ponzi schemes and other fraudulent investment schemes, prescribing strict penalties for violators.
– Tribunal Reforms: Amendments have been made to the composition, jurisdiction, and functioning of the Investments and Securities Tribunal to improve efficiency.
Agama praised the National Assembly for its commitment to strengthening Nigeria’s economic framework and acknowledged the contributions of the Minister of Finance and other stakeholders. He assured that SEC would continue engaging market participants to ensure a smooth transition from the repealed ISA 2007 to the new legal framework.
The enactment of ISA 2024 marks a significant milestone in Nigeria’s financial sector, reinforcing investor confidence and fostering economic growth.
