By Niyi Jacobs
In a landmark move to enhance investor confidence and streamline Nigeria’s capital market operations, the Senate has passed the Investments and Securities Bill (ISB) 2024. The bill, which repeals the Securities and Exchange Act of 2007, introduces comprehensive reforms aimed at strengthening the regulatory framework for investments and securities businesses in the country.
During the plenary on Wednesday, Senate Chief Whip, Tahir Monguno, emphasized that the bill would protect investors and eliminate fraudulent activities in the capital market. Leading the debate, Chairman of the Senate Committee on Capital Market, Senator Osita Izunaso, highlighted the bill’s potential to transform the market by encouraging foreign investments, boosting investor confidence, and enhancing regulatory oversight.
“The ISB 2024 establishes a new regulatory framework that aligns with global standards,” Izunaso stated. “It addresses key areas like derivatives, systemic risk management, financial market infrastructure, and the elimination of Ponzi schemes. It also seeks to enhance the Securities and Exchange Commission’s capacity to ensure capital formation, fair market practices, and investor protection.”
Key provisions of the bill include:
Harsher Penalties for Ponzi Scheme Operators: A minimum fine of ₦20 million or up to 10 years in prison for offenders.
Expanded Investor Protection Fund (IPF): Coverage now includes losses due to brokerage firm deregistrations, beyond current cases of bankruptcy or negligence.
New Frameworks for Commodity Exchanges: Introduction of regulations for warehouse receipts to stimulate the commodities market.
Director General of the SEC, Dr. Emomotimi Agama, lauded the Senate’s action, noting the bill’s significance in reducing market ambiguities, safeguarding investors, and aligning Nigeria’s capital market with international best practices. “This is a pivotal step toward creating a world-class capital market capable of supporting Nigeria’s economic diversification,” he remarked.
Senate President Godswill Akpabio expressed optimism that the bill would encourage investments by minimizing risks in the market. He described its passage as a critical step in fostering economic transformation.
With the ISB 2024, Nigeria aims to strengthen its capital market infrastructure and reposition the sector for robust growth, offering enhanced protections to investors and ensuring transparent and efficient market operations.
