Tinubu Assents To Investments And Securities Act (ISA) 2024

President Bola Tinubu has officially assented to the Investments and Securities Act (ISA) 2024, repealing the previous Investments and Securities Act No. 29 of 2007.

This landmark legislation marks a significant step in the reform of Nigeria’s capital market, aimed at enhancing market integrity, improving investor protection, and fostering sustainable growth.

The assent was confirmed in a statement issued by the Securities and Exchange Commission (SEC) on Saturday, emphasizing the act’s transformative provisions and alignment with global best practices.

Naija News gathered that the new ISA 2024 reinforces the role of the SEC as the apex regulatory authority overseeing Nigeria’s capital market. According to the SEC statement, enacting this law consolidates the SEC’s position and introduces reforms that will help position Nigeria’s market in line with international standards.

“The ISA 2024 reflects our commitment to building a dynamic, inclusive, and resilient capital market. By addressing regulatory gaps and introducing forward-looking provisions, the new Act empowers SEC to foster innovation, protect investors more efficiently and reposition Nigeria as a competitive destination for local and foreign investments,” said Dr. Emomotimi Agama, the Director-General of SEC.

Agama also extended his gratitude to all stakeholders, including the National Assembly, for their collaboration in bringing the legislation to fruition.

“We commend all stakeholders within and outside the capital market community for their unwavering solidarity towards the achievement of this historic milestone. We solicit their continued collaboration in respect of the effective implementation of the ISA 2024 for the benefit of our economy,” he added.

The new Act introduces several crucial reforms that aim to elevate Nigeria’s capital market to global standards. Notably, the Act enhances the regulatory powers of the SEC, aligning it with the requirements of the International Organization of Securities Commissions (IOSCO), and ensuring that Nigeria maintains its “Signatory A” status under IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU).

Some Of The Key Provisions In The ISA 2024 Include:

Classification of Exchanges: The Act classifies securities exchanges into “Composite” and “Non-composite” categories, offering a clear distinction between exchanges that handle various categories of securities and those that focus on specific types of securities or products.

Inclusion of Virtual and Digital Assets: For the first time, the Act explicitly recognizes virtual and digital assets, classifying them as securities. It also brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under the regulatory framework of the SEC.

Financial Market Infrastructures: The Act introduces provisions related to financial market infrastructures such as Central Counter Parties, Clearing Houses, and Trade Depositories, which are critical for the smooth functioning of the capital market.

Legal Entity Identifiers (LEIs): The mandatory use of LEIs by participants in capital market transactions is introduced to enhance transparency in the conduct of securities transactions.

Ponzi Schemes and Unlawful Investment Schemes: The Act expressly prohibits Ponzi schemes and other illegal investment practices, prescribing stringent penalties, including jail terms, for the promoters of such schemes.

Focus On Commodities Exchange And Increased Flexibility For Fund Raising

Another major highlight of the new ISA 2024 is the regulation of Commodities Exchanges and Warehouse Receipts. This provision is crucial for the development of the commodities ecosystem in Nigeria, allowing for the growth of the sector and opening new avenues for investment.

The Act also addresses the restrictions on raising funds from the capital market by sub-nationals, providing greater flexibility and making it easier for state and local governments to access capital for development projects.

In addition, the Act includes important amendments to the composition and operations of the tribunal responsible for handling capital market disputes. The changes are designed to enhance the tribunal’s efficiency and effectiveness in fulfilling its mandate.

In his remarks, Dr. Agama emphasized that ISA 2024 represents a bold step forward for Nigeria’s capital market.

“We also commend the Honourable Minister of Finance and Coordinating Minister of the Economy of Nigeria, as well as the Minister of State for Finance, for their invaluable contributions to the realization of this groundbreaking project. Their strategic guidance, policy expertise, and steadfast support have ensured that the ISA 2024 aligns with Nigeria’s broader economic objectives,” Agama stated.

The new law is expected to bring about a more robust, transparent, and competitive Nigerian capital market, with far-reaching benefits for both domestic and international investors.

The SEC has assured stakeholders that it will continue to engage market operators, investors, and other relevant parties to ensure a seamless transition and full implementation of the new legal regime.