Regulatory Update: Sec Issues Circular On Revised Minimum Capital (Mc) For Regulated Capital Market Entities

1. Introduction

On 16^th January 2026, the Securities and Exchange Commission (the “SEC”) released Circular Number 26-1 on the revision of Minimum Capital (MC) applicable to all categories of regulated capital market entities and this Circular seeks to strengthen market resilience, enhance investor protection, align capital adequacy with the evolving risk profile of market activities, and ensure that regulated entities possess sufficient financial capacity to discharge their obligations in a sustainable manner.¹ This Regulatory Update sheds light on the objectives, scope, revised content, timeline for compliance, and effective date of publication of the Circular on Revised Minimum Capital for Regulated Capital Market Entities.

2. Objectives of the Circular

The SEC seeks to achieve the following goals with the Circular:

1. To enhance the financial soundness and operational resilience of market operators;
2. To align capital requirements with the scope, complexity, and risk exposure of regulated activities;
3. To promote market stability and systemic risk mitigation; and
4. To support innovation and orderly development of new market segments, including digital assets and commodities markets.

3. Scope and Bandwidth of the Circular

This Circular applies to all entities regulated by the SEC, including but not limited to:

1. Core and non-core capital market operators;
2. Market infrastructure institutions;
3. Capital market consultants;
4. Financial technology (FinTech) operators;
5. Virtual Asset Service Providers (VASPs); and
6. Commodity market intermediaries.

4. Revised Minimum Capital

All entities regulated by the SEC are required to pay attention to the revised Minimum Capital set out in the Circular and comply accordingly. A table setting out the 2015 Minimum Capital and the Revised Minimum Capital² is available on SEC’s online platform.

5. Effective Date of Publication of the Circular and Timeline for Compliance

The Circular takes effect from the date of its publication, being 16^th January 2026. All affected entities are required to comply with the revised Minimum Capital Requirements on or before 30^th June 2027. Entities that fail to meet the prescribed requirements within the stipulated timeline shall be subject to appropriate regulatory sanctions, including suspension or withdrawal of registration, as may be determined by the SEC.

6. Transitional Arrangements and Guidance

The SEC may, upon application and on a case-by-case basis, consider transitional arrangements where justified. It shall also issue detailed guidance on compliance modalities and capital verification processes.

7. Conclusion

In line with its statutory mandate to to regulate and develop the Nigerian capital market under section 3(1) and (3) of the Investments and Securities Act 2025, the SEC has taken a bold and commendable step to revise the Minimum Capital applicable to all categories of regulated capital market entities. It is our view that this Circular will better protect people who invest money in entities regulated by the SEC, ensure that regulated entities have enough money to cover the risks of their business activities, and also ensure that regulated entities have the financial strength to meet their long-term obligations.

Footnotes

* Securities and Exchange Commission, ‘Circular Number 26-1 Minimum Capital Requirements’ (Sec.gov.ng, 16 January 2026) <https://sec.gov.ng/documents/1427/CIRCULAR_Number_26-1._Minimum_Capital_Requirements.pdf> accessed 16 January 2026.

1  Ibid.

2  Ibid.

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