The leadership of the Securities and Exchange Commission (SEC) is building a dynamic, transparent and robust capital market to support Nigeria’s pursuit of economic diversification and development, writes Ayodeji Komolafe
Nigeria’s capital market has long been recognized as a barometer of the country’s economic health and a key driver of growth. Under the strategic leadership of the Securities and Exchange Commission (SEC Nigeria), this engine has been meticulously rebuilt, refined and accelerated. The Commission is no longer just a regulator. It is a visionary architect, building markets that are resilient, inclusive, innovative and globally competitive. This multifaceted transformation, focused on sustainability and economic prosperity, is evident in several groundbreaking initiatives.
Fundamentals: Investment Securities Act of 2025 (ISA)
A solid legal framework is the foundation of a thriving capital market. And, recognizing that previous laws struggled to keep pace with the rapidly evolving financial landscape, the SEC defended the landmark Investment Securities Act of 2025 (ISA). According to market participants, this is not just an amendment, but also a comprehensive review with an eye on the future.
Key innovations in ISA 2025 include:
* Increased regulatory authority: This will allow the SEC to proactively address complex market abuses, cybersecurity threats, and the cross-border nature of modern finance.
* Embracing FinTech and digital assets: The law provides clear regulatory certainty for digital assets, including cryptocurrencies and tokenized securities, fostering innovation while ensuring investor protection.
*Strengthening corporate governance: Introducing stricter governance rules and accountability measures for listed companies, strengthening market integrity and attracting high-quality listings.
* Streamlined Dispute Resolution: The Act establishes a more efficient mechanism for resolving investor complaints and strengthens confidence in market fairness.
ISA 2025 is a strategic blueprint that positions Nigeria as a forward-thinking jurisdiction for investment and powers all other initiatives.
Protecting investors: A relentless crackdown on pyramid schemes
The scourge of Ponzi and other illegal investment schemes has eroded the savings of countless Nigerians and damaged public confidence. However, the SEC has moved from recommendations to aggressive action under its “Operation Know and Verify” campaign.
Leveraging the enhanced powers of ISA 2025, the Commission will:
* Employ advanced surveillance: Leverage technology and data analytics to identify and track the digital footprint of illicit fund managers.
* Speedy enforcement of sanctions: Perpetrators now face stiff penalties, including asset confiscation and prosecution, which is a powerful deterrent.
* Massive public awareness: A relentless campaign across traditional and social media to educate the public on how to identify and report these schemes, making them our first line of defense.
This unwavering commitment to cleaning the market ecosystem is fundamental to maintaining market integrity and protecting the hard-earned money of Nigerians.
Deepening inclusiveness: Strategic promotion of interest-free finance
To tap into the vast domestic and international capital, the SEC has strategically focused on growing the non-interest financing (NIF) sector. Understanding its appeal, which goes beyond religious considerations and includes ethical and alternative funding, the committee:
We have developed a robust regulatory framework. We have developed clear guidelines for the issuance of sukuk, Islamic funds and other NIF products.
* Catalytic market activity: The successful issuance of sovereign sukuk for infrastructure development has demonstrated the viability of this asset class and paved the way for corporate issuers.
* Developed Capacity Building: Work with market operators to build expertise in building, distributing, and managing NIF products.
This focus isn’t just about inclusion. It will also free up billions of dollars of ethical capital for national development and fund critical projects in infrastructure, housing and agriculture.
Globalization: Strategic international engagement and partnerships
Capital markets are not isolated. The SEC has actively re-engaged with the global financial community to attract foreign investment, share best practices and improve Nigeria’s standing.
* Membership in international organizations: Active participation in organizations such as the International Organization of Securities Commissions (IOSCO) ensures that Nigeria’s voice is heard and that its regulations are in line with global standards.
* Roadshows and Investor Meetings: Targeted initiatives in key financial hubs such as London, New York and Dubai showcase the reformed Nigerian market and its attractive investment opportunities.
* Memorandum of Understanding: Bilateral agreements with other capital market regulators facilitate cross-border supervision and information exchange.
The proof is in the numbers: significant increase in market capitalization
As a concrete result of these strategic reforms, the market is experiencing remarkable growth. Nigeria Exchange Limited (NGX) has surpassed a historic milestone with a significant increase in market capitalization.
For example, the stock market arm of the Nigeria Exchange Limited (NGX) rose by 45.5 percent or N28.52 trillion to reach N91.286 trillion at the end of November from N62.763 trillion at the end of 2024.
Similarly, the November 2025 closing price of the NGX All-Share Index was 143,520.53 basis points, an increase of 39.44% from the year-end 2024 closing price of 102,926.40 basis points.
This growth is being driven by:
* Improved investor confidence: Domestic and international investors are responding positively to the strengthened regulatory environment.
*Initial listing: Listing a major domestic company and rewarding it with a higher valuation.
* Strong performance of key sectors: Banking, telecommunications and consumer staples have shown remarkable resilience and growth.
This increase in market capitalization is a direct vote of confidence in the SEC’s stewardship and is a strong indicator of the market’s important role in wealth creation.
Cooperation for development: World Bank, IFC, FSD Africa
Recognizing the value of strategic partnerships, the SEC has deepened its collaboration with development finance institutions. Our close collaboration with the World Bank, International Finance Corporation (IFC) and FSD Africa contributes to:
* Technical assistance: building internal capacity for risk-based supervision and developing new market segments such as green bonds.
*Market development: Supporting efforts to deepen the corporate bond market and improve liquidity.
* Investor Education Program: Co-funds a national campaign to improve financial literacy.
These partnerships provide not only funding but also world-class knowledge and technical expertise to accelerate the market’s development trajectory.
Groundbreaking move: transition from T+3 payments to T+2 payments
In a landmark move for market efficiency, the SEC successfully orchestrated the transition from the T+3 settlement cycle to the T+2 settlement cycle. This means that trades will be settled 2 business days after the trade date instead of 3 business days after the trade date.
The impact is serious.
* Reduced counterparty risk: Faster settlement times mean less exposure to default risk for buyers and sellers.
* Enhanced liquidity: Investors have faster access to funds and securities, improving capital efficiency.
* Global Competitiveness: The T+2 cycle will align Nigeria with major global markets such as the US and Europe, making the country more attractive to international investors.
Although complex in execution, this technical achievement demonstrates the SEC’s commitment to building a market that is not only large but also efficient and modern.
A market reimagined for a prosperous future
The journey of the Nigerian capital market under the current leadership of the SEC is a compelling story of transformation. By strengthening our legal foundations, protecting investors, promoting inclusive finance, engaging globally, fostering strategic partnerships, and increasing operational efficiency through ISA 2025, the Commission is not just building a market, but a sustainable platform for long-term economic prosperity. The significant increase in market capitalization is a reflection of these efforts. As Nigeria continues on its path to economic diversification and development, a dynamic, transparent and robust capital market championed by the SEC will undoubtedly be a cornerstone.
* Komolafe, an economist and investment banker, writes from Lagos.
