Key Provisions of the Investments and Securities Act (ISA) 2025.

At the heart of Nigeria’s capital market regulation is the Investments and Securities Act (ISA), a comprehensive law that governs how securities are issued, traded, and managed. On March 31, 2025, President Bola Ahmed Tinubu signed the Investments and Securities Bill 2025 (“ISB”) into law, repealing Investments and Securities Act No. 29, 2007 (“ISA 2007”) and enacting the Investments and Securities Act 2025 (the “Act”). In this article, we highlight some of the key provisions of the Act.

Key Reforms of The ISA

‍Expansion of the Regulatory Oversight of the Securities and Exchange Commission (“The Commission”)

‍In addition to its regulatory supervision of the securities market, the Commission is now empowered to register and regulate virtual and digital asset exchanges credit enhancement services, collateral managers, virtual assets service providers, digital asset operators, credit enhancement facility providers, and online forex trading activities. The Act also provides that the Commission has the power to penalise sponsors of prohibited financial schemes, such as ponzi schemes.‍

Supervision of Capital Market Operators, Public Companies, and other Entities‍

To maintain confidence in the capital markets and ensure the protection of investors and shareholders, the Act empowers the Commission to intervene in certain situations. The Commission can step in where public companies, capital market operators, or other entities have acted in a manner detrimental to investors or shareholders. This intervention is especially warranted when such entities have failed to take appropriate action to safeguard the interests of shareholders and the public. They also have the authority to appoint independent directors, place directors of companies on probation for some time, and even seal up premises of persons illegally carrying out investment schemes, and capital market operations.‍

Penalty for Non-Registration with the Commission

‍Under the Act, any director, promoter, or controller of a company that operates a securities exchange without registering with the Commission is liable to a fine of ₦10,000 or, upon conviction, to a term of imprisonment of not less than five years.‍

Categories of Securities Exchange

‍A key highlight of the Act is the classification of securities exchanges into two categories: composite and non-composite. A composite securities exchange allows for the listing, quotation, and trading of all types of securities, commodities, and financial products on the SEC platform. A non-composite securities exchange operates as an alternative trading system that brings together buy and sell orders. It may function either online or in a physical location.

Supervisory Obligations

‍The Commission is empowered to supervise the operations of self-regulatory entities. No entity or association may operate as a self-regulatory organisation unless it meets the registration requirements prescribed by the Commission.

Filing of Annual Reports by Public Companies‍

Under the Act, public companies whose securities are registered with the Commission are required to file their audited financial statements and other periodic returns with the Commission annually, or as may be specified. The Act also mandates public companies to establish a system of internal controls over financial reporting and the security of company assets. It places a duty on the board of directors to ensure the integrity and effectiveness of these control systems and reporting processes. Failure to comply attracts a penalty of not less than ₦5,000,000, plus an additional ₦50,000 for each day the violation continues.‍

Unclaimed Dividends of Public Companies

‍The Act directs that the Commission shall make rules and regulations for unclaimed dividends of public companies.‍

The Investments and Securities Tribunal

‍The Act introduces significant reforms to enhance the role and structure of the Investment and Securities Tribunal (IST) as the primary forum for resolving capital market disputes. The following are the key changes:

1. The number of Tribunal members has been increased from 10 to 12. Members will include legal practitioners and capital markets experts. Unlike the ISA 2007, where appointments were solely at the discretion of the Minister, the Act provides that members will be appointed by the President on the recommendation of the Minister.
2. The Tribunal has exclusive jurisdiction to determine the following:
   
   • Complaints against direct actions taken by the Securities and Exchange Commission (SEC).
   • Failure of the Commission to act on a matter referred to it within 60 days.
   • Disputes arising from regulatory actions taken by the Commission under Act.
3. The Tribunal also exercises appellate jurisdiction over:
   
   • Disputes among participants in the securities market.
   • Matters involving the administration, management, and operation of collective investment schemes.
   • Reviews, approvals, and regulation of mergers, takeovers, and restructuring of public companies.

Conclusion

The Investments and Securities Act 2025 marks a significant step forward in the evolution of Nigeria’s capital market regulation. By expanding the regulatory powers of the Commission, modernising the oversight of public companies and digital asset operations, and strengthening the dispute resolution framework through reforms to the Tribunal, the Act seeks to promote transparency, enhance investor confidence, and ensure the integrity of the capital market.

As Nigeria’s financial landscape continues to evolve, market participants and operators must familiarise themselves with these provisions to ensure full compliance. ecosystem and the Federal Government. The startup bill aims to strengthen the business environment and harness the potential of the digital economy. The bill will ensure that laws and regulations are friendly, planned and work for the ecosystem.