Introduction
In a major step toward modernizing Nigeria’s financial sector in order to align with global best practices, President Bola Tinubu on March 29, 2025, signed the Investments and Securities Act (ISA) 2024 into law, repealing the 2007 Act and ushering in a new era for the Nigerian capital market. According to the Securities and Exchange Commission (SEC), this landmark legislation strengthens the market’s legal framework, enhances investor protection, and introduces critical reforms to bolster market integrity, transparency, and sustainable growth. The Act reaffirms the Securities and Exchange Commission’s authority as the apex regulatory body while expanding the definition of securities to include virtual assets like cryptocurrencies, bringing them under regulatory control. This ensures that digital asset operators, exchanges, and service providers adhere to strict investor protection standards, positioning Nigeria as a more structured and resilient financial hub.
Notable Innovations and Reforms under the Act
The following are notable provisions/reforms under the the new Investment and Securities Act, 2024.
- Expansion of the definition of Securities
Under the Act[1], the term “securities” refers to debentures, stocks, and bonds issued by a government, as well as debentures, stocks, shares, bonds, and notes issued by a corporate entity. It also covers any rights or options related to these financial instruments. Notably, virtual assets and investment contracts are now formally recognized as securities, expanding the regulatory scope to include modern financial products.
Additionally, commodities futures, contracts, options, and other derivatives fall within the definition of securities. The term also encompasses securities from the categories listed above that can be transferred electronically through modes approved by the Securities and Exchange Commission (SEC). These securities may also be deposited, stored, or kept with licensed depository or custodian companies as provided under this Act.
The Act explicitly recognises virtual/digital assets and investment contracts as securities and brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs) and Digital Asset Exchanges under the SEC’s regulatory purview.
- Merger Control for Public Companies
The Investments and Securities Act (ISA) 2024 mandates that no public company shall undertake a scheme, transaction, arrangement, or issue securities related to corporate actions and restructurings without obtaining prior approval from the Securities and Exchange Commission (SEC[2]). This provision has further reinforces the Securities and Exchange Commission’s authority over merger control in Nigeria involving public companies, complementing the Federal Competition and Consumer Protection Act, 2018 and ensuring regulatory oversight in public company restructurings.
Under the Act, SEC approval is required for transactions involving share conversions, corporate restructuring (such as carve-outs, spin-offs, or split-offs), and asset acquisitions or disposals that significantly alter a company’s business direction. Additionally, any party seeking to merge two or more listed companies through a securities issuance must first obtain SEC approval. In granting such approval, the SEC will evaluate whether all shareholders are treated fairly, equitably, and provided with sufficient information regarding the transaction.
- Enforcement Against Illegal Investment Schemes and Transparency
The Investments and Securities Act (ISA) 2024 expressly prohibits Ponzi schemes and other unlawful investment schemes, prescribing stringent penalties, including fines and prison terms, for their promoters[3]. Under the Act, the Securities and Exchange Commission (SEC) is empowered to impose fines starting at ₦5 million and prison sentences of up to 10 years, or both, on individuals involved in illegal investment schemes.
Moreover, the scope of the Investor Protection Fund (IPF) has been expanded to cover investor losses resulting from the revocation or cancellation of a brokerage firm’s license[4].
The Act also introduces strict measures to ensure transparency in takeover offers, mergers, and restructurings. It prohibits acquirers, offerors, offerees, financial advisers, and other relevant parties from submitting false or misleading documents, omitting material information, or engaging in deceptive practices. Any violation of these provisions constitutes an offence punishable by a fine of at least ₦5 million, imprisonment of up to 10 years, or both. Alternatively, the SEC may impose an administrative penalty of no less than ₦10 million, in addition to other enforcement actions outlined in the Act.
- Fortifying the Investments and Securities Tribunal
The Investments and Securities Act (ISA) 2024 introduces key amendments to the Investments and Securities Tribunal to enhance its effectiveness in resolving capital market disputes. These amendments cover the composition and constitution of the Tribunal, the qualifications and appointment of the Chief Registrar, and the Tribunal’s jurisdiction, ensuring it is better equipped to efficiently discharge its mandate.
- Classification of Exchanges and Provisions on Financial Market Infrastructures
The Investments and Securities Act (ISA) 2024 introduces a new classification system for Securities Exchanges, categorizing them as either Composite or Non-composite Exchanges[5]. A Composite Exchange allows the listing and trading of all types of securities, commodities, and financial products, while a Non-composite Exchange specializes in a specific type of security or product. The Act further classifies Non-composite Exchanges into Mono Securities Exchanges, which focus on a single type of security or commodity, and Alternative Trading Systems, which facilitate buyer-seller transactions either through physical locations or online platforms.
Additionally, the Act includes new provisions on Financial Market Infrastructures (FMIs) such as Central Counterparties, Clearing Houses, and Trade Depositories, enhancing the efficiency and stability of Nigeria’s capital markets. This structured approach simplifies the registration and operations of securities exchanges, ensuring greater transparency, regulatory oversight, and market development.
- Insolvency Protection for Financial Market Infrastructures
The Act ensures that transactions involving Financial Market Infrastructures (FMIs) are not affected by general insolvency laws, protecting them from disruptions caused by financial distress.
- Managing Systemic Risk
New provisions have been introduced to monitor, manage, and reduce risks that could affect the stability of Nigeria’s capital market.
- Expanded Categories of Issuers
The Act broadens the types of entities that can issue securities, allowing for more innovative financial products and expanding opportunities for commercial and investment activities, subject to SEC approval and regulatory controls.
- Legal Framework for Commodities Exchanges
A new section in the Act regulates Commodities Exchanges and Warehouse Receipts, helping to develop and strengthen Nigeria’s commodities market.
- Fundraising Flexibility for Sub-Nationals
The Act removes some restrictions on state governments and their agencies when raising funds from the capital market, allowing for greater financial flexibility.
Conclusion
The Investments and Securities Act (ISA) 2024 marks a significant milestone in the evolution of Nigeria’s capital market, introducing bold reforms that enhance regulatory oversight, market efficiency, and investor protection. With numerous landmark provisions, the Act paves the way for a more dynamic, transparent, and resilient financial ecosystem. As Nigeria continues to position itself as a key player in the global investment community, the Act provides the necessary foundation needed to foster innovation, attract capital, and drive sustainable economic growth.
References
1. ‘Tinubu Signs Investment and Securities Act 2024 into Law’ (Nairametrics, 29 March 2025) <https://nairametrics.com/2025/03/29/tinubu-signs-investment-and-securities-act-2024-into-law> accessed 29 March 2025.
2. ‘Tinubu Signs Investments, Securities Act 2025 into Law’ (Premium Times, 29 March 2025) <https://www.premiumtimesng.com/business/business-news/784459-tinubu-signs-investments-securities-act-2025-into-law.html> accessed 29 March 2025.
3. Aluko & Oyebode, ‘Imminent Changes to Nigeria’s Investments and Securities Law’ (Aluko & Oyebode, 2025) <https://www.aluko-oyebode.com/insights/nigeria-investments-securities-bill-2024-key-provisions> accessed 29 March 2025.
4. ‘Market Regulation: Senate Passes Investment and Securities Bill 2024’* (Proshare, 2025) <https://proshare.co/articles/market-regulation-senate-passes-investment-and-securities-bill-2024?category=Regulators&classification=Read&menu=Regulators> accessed 29 March 2025.
5. ‘The Investments and Securities Bill, 2024’ (Proshare, 2025) <https://proshare.co/articles/the-investments-and-securities-bill-2024?category=Taxation&classification=Read&menu=Reports> accessed 29 March 2025.
6. ‘Tinubu Signs Investments, Securities Act 2024 into Law’ (The Hope Newspaper, 29 March 2025) <https://www.thehopenewspaper.com/tinubu-signs-investments-securities-act-2024-into-law> accessed 29 March 2025.
ABOUT THE AUTHOR
Mustapha Toheeb is the founder of Lex Updates Publications. He is interested in advocacy, academic writing, legal writing/history, activism, and a plethora of positivism. To reach him, email: toheebmustapha15@gmail.com or contact/WhatsApp: 08106244073.
[1] Section 350 of the Investment and Securities Act,2024.
[2] Section 139 of the Investment and Securities Act,2023.
[3] Section 146 of Investment and Securities Act,2024.
[4] Section 197 of the Investment and Securities Act,2024.
[5] Section 27 of Investment and Securities Act,2024.
