On the 16th day of January 2026, the Securities and Exchange Commission (SEC) of Nigeria issued a circular revising the Minimum Capital requirements for all categories of regulated capital market entities. The circular, issued under the Commission’s mandate pursuant to the Investments and Securities Act, 2025, represents the most significant adjustment of capital thresholds in over a decade and is designed to strengthen the resilience and operational capacity of the Nigerian capital market. This article provides an in-depth analysis of the SEC revised minimum capital for regulated capital market entities in Nigeria.
What is the Purpose of the Adjustment?
The revised minimum capital framework reflects the SEC’s strategic aim to:[1]
- Enhance the financial stability and operational robustness of capital market operators.
- Ensure that capital requirements are appropriately aligned to the changing risk exposures associated with regulated activities.
- Enhance investor protection and promote market stability
- Promote innovation across emerging segments of the capital market, including financial technology, digital assets, and commodities trading.
These adjustments are intended to modernize regulatory capital adequacy standards in light of changes in market dynamics since the last major review in 2015.
What is the Scope of Application?
The revised minimum capital requirements apply broadly to all entities regulated by the SEC, including but not limited to:[2]
- Core and non-core capital market operators (e.g., brokers, dealers, fund managers);
- Market infrastructure institutions (e.g., exchanges, clearing houses);
- Capital market consultants and advisers;
- Financial technology operators;
- Virtual Asset Service Providers (VASPs); and
- Commodity market intermediaries.
SEC REVISED MINIMUM CAPITAL FOR REGULATED CAPITAL MARKET ENTITIES
Key Capital Requirement Changes
1. Core Capital Market Operator
The most notable increases are in core licensing categories.
- Brokers (client execution only): Minimum capital raised from ₦200 million to ₦600 million.
- Dealers (proprietary trading): Increased from ₦100 million to ₦1 billion.
- Broker-Dealers (combined services including proprietory trading, client execution, etc): Revised from ₦300 million to ₦2 billion.
- Inter-Dealer Brokers: Elevated sharply from ₦50 million to ₦2 billion.
- Sub-Brokers: Substantial increases across all classes; N10 million to N100 million for digital sub-brokers, N10million to N50 million for corporate, and N2 million to N10 million for individual sub-brokers.
2. Fund and Portfolio Management
Fund and portfolio management entities now face significant capital floors. They include:
- Tier-1 Full-Scope Managers: Raised from ₦150 million to ₦5 billion. It is important to note that Managers with assets under management (AuM) above ₦100 billion must hold a minimum of 10% of AuM as capital.
- Tier-2 Limited-Scope Managers: Increased to ₦2 billion. For Alternative Investment Fund Managers (e.g., venture capital): Capital floors increased proportionally.[3]
3. Non-Core Services and Advisory
The significant adjustments in this category include:
- Issuing Houses: They are now required to hold between ₦2 billion and ₦7 billion depending on their underwriting role.
- Registrars: The minimum capital for registrars is now raised to ₦2.5 billion.
- Trustees and Underwriters: For trustees, N300 million to N2 billion and underwriters, from N200 million to 5 billion.
4. Market Infrastructure
Entities forming the plumbing of the market see pronounced hikes:[4]
- Central Counter Parties (CCPs): The minimum capital raised is now ₦10 billion for CCPs
- Clearing and Settlement Companies (CSCs): For clearing and settlement companies, the minimum capital is now ₦5 billion.
- Composite Securities Exchanges (entities trading and listing all types of securities): Minimum capital now ₦10 billion.
5. FinTech and Virtual Assets
a. Robo-Advisers: They are now required to have ₦100 million minimum capital
b. Crowdfunding Platforms: Minimum capital now increased to ₦200 million.
c. Digital Asset Exchanges and Custodians: The minimum capital has been raised to ₦2 billion.
d. Virtual Asset Service Providers (VASPs) and Tokenisation Platforms: New minimum capital floors introduced across all virtual asset service providers.
6. Commodity Market Intermediaries and Consultants
Commodity brokers, warehousing operators, collateral managers and capital market consultants also face revised capital requirements that reflect their operational risks.[5]
What is the Compliance Timeline?
All affected entities are mandated to comply before 30 June 2027. Entities that fail to meet the revised requirements risk regulatory sanctions, including suspension or cancellation of registration. The SEC may grant transitional arrangements on a case-by-case basis where justified, and further guidance on implementation and capital verification processes will be provided separately.
What are the Implications for Capital Market Operators?
From a legal and operational perspective, the revised minimum capital regime carries several implications:
1. Capital Planning and Restructuring
Firms below the new thresholds will need to undertake recapitalisation exercises, which may include:
a. Rights issues or private placements;
b. Strategic partnerships or capital injections;
c. Mergers and acquisitions to meet capital demands.
2. Competitive Landscape
Smaller market operators may experience consolidation pressures, potentially reducing the number of boutique firms but engendering stronger institutions capable of withstanding market stress.
3. Innovation and Market Entry Limitation
While the revisions aim to support innovation, the elevated capital floors for FinTech and digital asset firms introduce a higher barrier to entry that may limit new entrants but enhance participant credibility and investor confidence.[6]
Conclusion
The SEC’s revised Minimum Capital framework constitutes a landmark regulatory overhaul in Nigeria’s capital market. It aims to protect the market against systemic risks, enhance investor protections, and align regulatory capital standards with global best practices and evolving business models. For capital market operators, understanding and planning for compliance ahead of the 2027 deadline will be critical to maintaining licensed status and competitive viability in Nigeria’s dynamic financial ecosystem.
For enquiries on the SEC revised minimum capital for regulated capital market entities, please contact us by using this link here or leave a message using our WhatsApp icon, and we’ll respond to you.
[1] https://sec.gov.ng/for-investors/keep-track-of-circulars/revised-minimum-capital-mc-for-regulated-capital-market-entities/
[2] https://sec.gov.ng/for-investors/keep-track-of-circulars/revised-minimum-capital-mc-for-regulated-capital-market-entities/
[3] https://sec.gov.ng/for-investors/keep-track-of-circulars/revised-minimum-capital-mc-for-regulated-capital-market-entities
[4] https://sec.gov.ng/for-investors/keep-track-of-circulars/revised-minimum-capital-mc-for-regulated-capital-market-entities/
[5] https://sec.gov.ng/for-investors/keep-track-of-circulars/revised-minimum-capital-mc-for-regulated-capital-market-entities/
[6] https://sec.gov.ng/for-investors/keep-track-of-circulars/revised-minimum-capital-mc-for-regulated-capital-market-entities/
