Tinubu Signs Investment And Securities Act 2024 Into Law, Paving Way For Capital Market Reforms
President Bola Ahmed Tinubu has officially signed the Investment and Securities Act (ISA) 2024 into law, introducing sweeping reforms which are aimed at strengthening Nigeria’s capital market and aligning it with global best practices.
The new legislation repeals the Investments and Securities Act No. 29 of 2007. It provides a modernized regulatory framework to enhance investor protection, improve market transparency, and foster sustainable economic growth.
In a statement released on Friday, the Securities and Exchange Commission (SEC) described the Act as a “transformative step” that reinforces its role as the apex regulator of Nigeria’s capital market.
Key Reforms Under ISA 2024
The Act introduces several structural and regulatory changes, including:
- Expansion of SEC’s regulatory powers to meet international standards, ensuring Nigeria maintains its “Signatory A” status under IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU).
- New classification of exchanges into Composite and Non-composite categories, defining the types of securities and products each can trade.
- Formal recognition of virtual assets and investment contracts as securities, placing Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under SEC’s oversight.
- Legal framework for commodity exchanges and warehouse receipts, facilitating structured financing for agriculture, mining, and other commodity sectors.
- Increased flexibility for sub-national governments to raise capital through the market, providing alternative financing for infrastructure projects.
- Stronger enforcement measures against Ponzi schemes and financial scams, imposing stricter penalties on fraudulent investment promoters.
- Market stability safeguards, exempting transactions processed through clearing houses and central counterparties from general insolvency laws.
- Broadened access to capital markets, allowing more entities to issue securities and enabling innovation in financial products.
- Mandatory Legal Entity Identifiers (LEIs) for market participants to enhance transparency and traceability in transactions.
- Strengthening of the Investments and Securities Tribunal, ensuring faster dispute resolution and better investor protection.
Stakeholders Hail the Development
SEC Director-General, Dr. Emomotimi Agama, described the signing as a “significant boost for investor confidence and capital market development.”
“The ISA 2024 reflects our commitment to building a dynamic, inclusive, and resilient capital market,” Agama stated.
He commended the National Assembly for its bipartisan support and acknowledged the contributions of the Minister of Finance and Coordinating Minister of the Economy, as well as the Minister of State for Finance, in shaping the law to align with the Tinubu administration’s economic vision.
Implications for Nigeria’s Capital Market
The ISA 2024 is expected to attract greater local and foreign investment. It is also expected to enhance regulatory clarity for digital and commodity markets, and provide a stronger legal foundation for capital formation.
With a more transparent and well-regulated investment environment, Nigeria moves closer to establishing a world-class capital market that is inclusive, innovative, and resilient.
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