Tinubu Signs New Investments and Securities Act into Law

President Bola Tinubu has signed the Investments and Securities Act (ISA) 2024 into law, replacing the previous 2007 version.

This new law aims to modernize Nigeria’s capital market by improving market integrity, protecting investors, and encouraging sustainable growth.

The signing was confirmed by the Securities and Exchange Commission (SEC) in a statement released on Saturday.

The new law strengthens the role of the SEC as the main regulator of Nigeria’s capital market and brings the country’s market in line with international standards.

The ISA 2024 introduces several reforms, including expanded regulatory powers for the SEC.

This development aligns Nigeria with global practices, particularly those set by the International Organization of Securities Commissions (IOSCO).

It also secures Nigeria’s “Signatory A” status under IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU).

The law includes several key changes.

For the first time, it recognizes virtual and digital assets as securities, bringing Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and exchanges under SEC regulation.

It also clarified the classification of exchanges, distinguishing between those that handle a variety of securities and those that focus on specific ones.

A notable addition is the focus on financial market infrastructures, including Central Counterparties, Clearing Houses, and Trade Depositories.

The law also mandates the use of Legal Entity Identifiers (LEIs) for transactions to improve transparency.

The new law also targets illegal investment practices, like Ponzi schemes, with severe penalties for those behind such operations. It introduces regulations for Commodities Exchanges and Warehouse Receipts, supporting the growth of Nigeria’s commodities sector.

The law also offers more flexibility for state and local governments to raise funds from the capital market for development projects.

Additionally, the law introduces changes to the capital market tribunal, aiming to improve its efficiency and effectiveness.

The SEC expressed its gratitude to all involved in the law’s development, including the National Assembly, and has committed to working closely with market participants to ensure smooth implementation.

This legislation is expected to enhance Nigeria’s capital market, making it more transparent, competitive, and attractive to both domestic and international investors.