On March 31st, 2025, the Investment and Securities Act 2025 (ISA) was signed into law, updating the previous ISA from 2007. This new legislation addresses the changes and advancements that have occurred over the last 18 years, bringing Nigeria’s capital market in line with global best practices.
Simply put, it introduces modern rules to tackle modern problems, putting Nigeria on par with global best practices. The law not only gives the Securities and Exchange Commission (SEC) more power but also officially recognizes digital assets, like cryptocurrencies, as securities. This means fintech companies and digital asset operators will now have clear rules to follow, making investments safer and allowing for more innovative financial products.
Why the Investment and Securities Act 2025 Was Introduced
For years, Nigeria’s capital market has struggled with outdated regulations and scams like Ponzi schemes. Older laws couldn’t keep up with the rise of digital assets or the new types of financial transactions we see today. Here’s why this new law was needed:
Investor Protection:
The Investment and Securities Act 2025 strengthens investor protection by introducing tougher penalties for fraud and Ponzi schemes. Under this new law, those who run fraudulent schemes could face up to 10 years in jail and fines of ₦40 million.
Global Alignment:
Updating the laws is also important to attract international investors. Countries with modern, reliable laws tend to see a 15–20% increase in investment from abroad. This is good news for Nigeria, which is working to get “Signatory A” status with IOSCO, an important global standard that only a few countries meet.
What Does the Act Change?
1. More Power for the SEC
The SEC now has more authority to:
• Access Critical Data: The SEC can get records from telecom and internet providers to help track down illegal activities.
• Better Market Oversight: With stronger enforcement powers, the SEC can better protect investors and keep the market fair.
2. Inclusion of Digital Assets
For the first time under the Investment and Securities Act, virtual assets and investment contracts will officially be recognized as securities. This means fintech companies can now:
• Innovate with Confidence: Startups can create new financial products and services with clear rules.
• Build Trust: Investors can feel more secure knowing that digital assets are now regulated.
3. Upgraded Market Infrastructure
The law creates two types of securities exchanges:
• Composite Exchanges: These can list all types of securities.
• Non-Composite Exchanges: These focus on specific asset types.
The law also introduces new systems for clearing houses and trade depositories to make transactions more transparent and efficient.
4. Support for Local Governments
States and local governments can now raise money through the capital market to fund infrastructure projects. This reduces their reliance on federal funds and commercial borrowing.
How Can Investors Benefit?
Improved Transparency and Protection:
Stronger rules and tougher penalties for fraud mean your investments are safer. Studies show that markets with solid regulations can attract more trust and investment—sometimes by 15–20%. Nigeria’s new law aims to do the same.
More Investment Opportunities:
With the wider definition of securities, you can now invest in more financial products, including digital assets. This opens up more options for diversifying your investments and growing your portfolio.
More Competitive Market:
With the Investment and Securities Act 2025 aligning local laws with global standards, investors can now gain access to safer, more diverse opportunities. This in turn also creates a more competitive environment where new fintech solutions can grow and succeed.
How Can You Use This Development to Your Advantage?
Stay Informed:
Keep an eye on news from the SEC and other trusted sources. Knowing about new investment opportunities, especially in digital assets, can help you stay ahead.
Diversify Your Portfolio:
Look into new financial products available because of the law. With digital assets now recognized as securities, you can explore investments in emerging fintech companies and new capital market options.
Talk to Financial Advisors:
Speak with experts who know the new rules. They can help you make the most of these changes while staying compliant with the new regulations.
Follow Global Trends:
Markets that follow modern regulatory standards often see a boost in investor confidence and attract more capital. As Nigeria’s market develops, this could lead to more growth and opportunity.
The Investment and Securities Act 2025 is more than just a new law—it’s a step toward a safer, more transparent, and innovative financial market in Nigeria. With better protection for investors, more opportunities in digital finance, and a stronger market infrastructure, this Act is setting the stage for a better financial future for everyone.
Stay informed, stay ahead, and be ready to take advantage of these exciting changes as Nigeria’s capital market evolves.
Bravewood provides Nigerian professionals with low-risk, high-return investment products, licensed by the Central Bank of Nigeria.
