1. Introduction

In a landmark regulatory reform, the Securities and Exchange Commission (‘SEC’) of Nigeria issued Circular No. 26-1 dated January 16, 2026 (the ‘Circular’)[i], introducing a comprehensive overhaul of the minimum capital requirements applicable to capital market operators in Nigeria, with full compliance required by 30 June 2027. This Directive is grounded in the SEC’s mandate under the newly enacted Investments and Securities Act (‘ISA’), 2025, and replaces the long-standing capital adequacy framework introduced in 2015, which had become increasingly misaligned with the scale, complexity, and risk profile of Nigeria’s modern capital market.

The revised framework represents one of the most significant regulatory interventions in the Nigerian capital market in over a decade. Beyond a mere upward adjustment of thresholds, the new requirements signal a deliberate policy shift by the SEC towards stronger balance sheets, enhanced market resilience, and greater investor protection. For operators, the Circular raises immediate compliance, structuring, and strategic questions. This Article provides an overview of the new regime, its scope of application, a comparison with the erstwhile 2015 thresholds, and the practical implications for market operators navigating the transition.

2. Scope of Application.

The new capital requirements apply broadly across the Nigerian capital market ecosystem. Its scope is deliberately expansive, reflecting the SEC’s intention to subject all materially active participants to a minimum level of financial robustness. They cover traditional core operators such as issuing houses, brokers, dealers, and fund or portfolio managers, as well as non-core participants including investment advisers. The Circular also extends to market infrastructure providers whose stability is critical to market integrity.. In addition, capital market consultants and a range of newer, technology-driven operators are now brought firmly within the regulatory perimeter, reflecting the regulator’s intent to close oversight gaps created by innovation in the capital market. Notably, the revised regime expressly captures financial technology (FinTech) operators, Virtual Asset Service Providers (VASPs), and commodity market intermediaries, each of which is now subject to defined minimum capital thresholds and enhanced regulatory expectations aligned with the nature and risk profile of their activities.

This expanded scope reflects a clear shift in regulatory thinking. The SEC is no longer focused primarily on how an operator is historically classified, but on the scale, risk profile, and potential market impact of its activities. Operators that may previously have been subject to lighter prudential oversight are now expected to meet capital standards proportionate to the systemic risk they pose.

3. Minimum Capital Requirements: Old vs New Thresholds.

A central feature of the Circular is the substantial upward review of minimum paid-up capital across virtually all operator categories. The table below highlights the key changes between the 2015 and the 2026 regime.

Taken as a whole, the revised minimum capital framework represents a decisive recalibration of entry and operating thresholds across the Nigerian capital market. The increases are not uniform but are instead risk-weighted, with the most significant uplifts concentrated in activities involving proprietary trading, asset management, market infrastructure, digital assets, and other forms of systemic intermediation.

Equally significant is the formalisation of bespoke capital thresholds for fintech operators and Virtual Asset Service Providers, signalling a shift from permissive innovation to prudential integration within the regulatory framework. In parallel, the substantial increases applicable to exchanges, clearing and settlement entities, and custodians underscore the SEC’s emphasis on financial resilience at systemically important points within the market infrastructure. In this context, the revised thresholds extend beyond compliance mechanics, they materially reshape the economics of participation in Nigeria’s capital market, setting the stage for consolidation, restructuring, and heightened regulatory discipline.

4. Implications for Market Operators.

These reforms carry significant financial implications for affected operators. For many operators, the revised thresholds will necessitate substantial capital raising within a relatively compressed timeframe. Equity injections may dilute existing shareholdings, while alternative funding structures could introduce balance-sheet pressure or investor resistance. Smaller and niche operators are likely to feel this impact most acutely, particularly where capital requirements have increased by several multiples. At the same time, well-capitalised operators are likely to benefit from enhanced market confidence and competitive positioning, as the new regime implicitly favours operators with scale, financial depth, and long-term investment capacity.

Beyond capitalisation, the new requirements are expected to drive meaningful operational adjustments across the market. Operators may be compelled to reassess their licence scope, streamline service offerings, or exit activities that are no longer commercially viable under the revised capital framework. The introduction of tiered licensing structures creates a clear incentive for some operators to downscale operations, while others may pursue consolidation through mergers, acquisitions, or strategic alliances. In particular, smaller broker-dealers, fintech-enabled platforms, and digital intermediaries may find consolidation to be the most efficient pathway to compliance and sustainability. The broader effect is likely to be a more concentrated market characterised by fewer, stronger operators and heightened regulatory sophistication.

From a compliance perspective, the Circular signals a more assertive supervisory posture by the SEC. Operators should expect increased scrutiny around capital verification, ongoing reporting obligations, and the adequacy of internal controls supporting capital maintenance. Failure to meet the revised thresholds within the prescribed timeline exposes firms to the risk of regulatory sanctions, including licence suspension or revocation. That said, the SEC has preserved a degree of regulatory flexibility by allowing for transitional arrangements on a case-by-case basis. Early engagement with the regulator, supported by credible compliance plans and professional advice, will therefore be critical for operators seeking to manage regulatory risk while navigating the transition.

5. Timeline for Compliance and Consequences.

The Circular provides a transitional compliance window, requiring all affected operators to meet the revised capital thresholds on or before June 30, 2027. Within this period, operators are expected to submit evidence of compliance or a credible compliance plan acceptable to the SEC.

Importantly, the SEC has reserved the right to impose regulatory sanctions, including licence suspension or revocation, on operators that fail to meet the deadline without an approved transition arrangement. This underscores that the grace period is not a relaxation of standards, but a practical window for orderly compliance.

6. Conclusion

This Circular represents the most far-reaching recalibration of capital requirements in the history of Nigeria’s capital market, underscoring the SEC’s clear policy objective of strengthening financial soundness and operational resilience across the ecosystem. For operators, the message is unequivocal: compliance is no longer a passive regulatory obligation but a strategic imperative. Operators must urgently reassess their capital positions, business models, and long-term viability in light of materially higher thresholds and a non-negotiable compliance deadline of 30 June 2027. Those that delay risk regulatory sanction or forced market exit, while those that act early position themselves to navigate the transition on more favourable terms.

In responding to the new regime, operators will need to adopt tailored strategies that reflect their size, licence scope, and growth ambitions. For some, this will involve equity injections, structured capital raising, or the introduction of strategic investors while for others, consolidation through mergers or acquisitions may offer the most efficient path to compliance. Certain operators may elect to restructure or rationalise their licence scope, while more sophisticated operators may explore platform or umbrella structures that allow capital to be deployed more efficiently within the regulatory framework. Across all scenarios, early engagement with the SEC and careful legal and financial planning will be critical. Ultimately, firms that approach the reforms proactively, with sound advice and decisive execution, will not only achieve compliance but may also strengthen their market credibility and competitive positioning under Nigeria’s upgraded capital market regime.

[i] Securities and Exchange Commission (Nigeria), Revised Minimum Capital (MC) for Regulated Capital Market Entities, Circular No. 26-1 (16 Jan. 2026) (published on the SEC website) — accessed 26 Jan. 2026