By Peter Egwuatu
The Securities and Exchange Commission (SEC) has announced new minimum capital requirements for operators in Nigeria’s capital market, raising thresholds for stockbrokers, dealers, fund managers, issuing houses, and digital asset companies.
In a circular released on Friday, the Commission unveiled a revised capital framework to replace the 2015 structure, giving operators until June 30, 2027 to comply.
Under the new rules, brokers must now hold ¦ 600 million, dealers ¦ 1 billion, while broker-dealers face a higher threshold of ¦ 2 billion due to their broader risk exposure. Fund managers will operate under a tiered system, with large firms needing up to ¦ 5 billion. A new rule also requires firms managing over ¦ 100 billion to hold 10 percent of assets as capital. Digital asset operators are now fully regulated, with exchanges and custodians required to hold N2 billion.
Private equity fund managers must hold ¦ 150 million, while managers of Collective Investment Schemes (CIS) and Alternative Investment Funds such as private equity, venture capital, and infrastructure funds with net asset values above ¦ 20 billion are subject to stricter requirements. Portfolio managers with assets under management exceeding N 100 billion must maintain a minimum of 10 percent of NAV/AuM as capital. Tier 2 fund and portfolio managers, with limited scope, will face lower thresholds tied to their NAV and pooled fund creation limits.
Explaining the rationale, SEC stated: “Pursuant to its statutory mandate under the Investments and Securities Act, 2025, to regulate and develop the Nigerian capital market, the Commission hereby issues this circular on the revision of minimum capital applicable to all categories of regulated capital market entities.
Industry reaction
Market participants said the announcement was expected. Some brokers noted that with an 18-month compliance window, the industry’s next phase will likely involve recapitalisation strategies, mergers, licence downgrades, and tighter competition. David Adonri, Analyst and Vice Executive Chairman at High Cap Securities Limited, remarked: “It is not a surprise as it has been on the burner. The increase in minimum capital requirement for capital market operators is very colossal. The Association of Stockbroking Houses of Nigeria (ASHON) is preparing a unified response on behalf of stockbroking firms.”
Also commenting, Tajudeen Olayinka, a Chartered Stockbroker and Investment Banker, said: “I see it as a good development, considering the fact that market operators need to be adequately capitalized to enable them deal with exigencies of time. Securities dealing and issuances are now largely technology-driven and require adequate human capacity. To be able to support a one trillion dollar economy, the capital market must be up and doing.”
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