Article By: Anthony Idigbe SAN, Tobenna Nnamani, Lovelyn Aniekwe, Kent Chima, Ogonna Eziechine, Bestman Chidiebere Nwaokocha.
The Investment and Securities Act 2025 (“the Act”) marks a comprehensive overhaul of Nigeria’s principal legislation governing investments and capital markets. This new law repeals the Investment and Securities Act 2007( “ISA 2007”), aligns Nigeria’s capital market framework with global best practices, and addresses regulatory gaps that had emerged over the years.
The Act introduces innovative provisions, including express recognition of the Commission’s independence, a clearer articulation of its objectives and functions, and enhanced powers of inspection and enforcement. The Act expands the scope of entities that can offer, sell and invite the public to trade in its securities. It incorporates detailed regulations for securities exchanges and exchange holding companies, introduces a regulatory framework for financial market infrastructures, and protects capital market transactions during insolvency proceedings. In addition, the Act addresses systemic risk management, the treatment of unclaimed dividends, the governance of self-regulatory organizations, and enforcement against prohibited investment schemes. These additions reflect a modern, proactive approach to capital market regulation, positioning the Nigerian market for deeper investor participation and institutional confidence.
Some notable reforms/innovations under the new Investment and Securities Act include:
- Independence of the Commission
Section 1(4) introduces a novel provision that emphasizes the independence of the Commission in alignment with the requirements set forth by the International Organization of Securities Commissions (IOSCO). The significance of this section lies in its assertion that the Commission will function autonomously, free from interference by other governmental bodies or external influences, except in instances explicitly detailed within the Act.
- Objectives, Functions and Powers of the Commission
The Act clearly delineated the objectives, functions and powers of the Commission, as opposed to what was obtained in the ISA 2007, where its objectives were merged with the functions. This structural shift in legislative drafting signifies an initiative to establish a more organized and transparent framework for the Commission’s roles.
Moreover, the Act provides greater clarity over the Commission’s regulatory role. New provisions officially recognize the Commission’s authority over the derivatives market and the National Savings Scheme, expand its mandate to cover the broader Nigerian commodities ecosystem, adjust the Commission’s role in mergers and acquisitions to align
with current law, and introduces a clear mandate for the Commission to combat Ponzi schemes and unregistered investment schemes.
Also, the powers of the Commission now include the authority to appoint Independent Directors to the Boards of public companies where the Commission has intervened or taken any regulatory actions, placing directors of public companies on probation for a reasonable duration as deemed necessary by the Commission, and auditing and demanding the production of records and documents from public companies and other regulated entities. In cases where there are investigations into capital market infractions, the Commission can impose administrative cautions, liens, or pursue judicial orders to freeze assets of individuals or firms. Furthermore, the Commission has the power to address unclaimed dividends of public companies, including those that are defunct or have ceased operations….
