SEC Revises Minimum Share Capital Requirements

The Securities and Exchange Commission (SEC), pursuant to its powers under the Investments and Securities Act, 2025, has issued Circular No. 26-1 dated 16 January 2026, revising the Minimum Capital Requirements applicable to all regulated capital market entities in Nigeria.

The revision is aimed at strengthening market resilience, enhancing investor protection, aligning capital adequacy with evolving market risks, and supporting innovation, including digital assets and commodities markets.

Key Highlights of the Revision

• Significant upward review of minimum capital thresholds across almost all categories of market operators.
• Expansion of coverage to FinTechs, Virtual Asset Service Providers (VASPs), and commodity market intermediaries.
• Introduction of tiered capital requirements based on operational scope, risk exposure, and asset size.
• Alignment with global best practices in capital adequacy and risk management.

Changes to note in the Circular No. 26 – 1 besides Capital Increases

• Tiered Fund/Portfolio Managers: Fund/Portfolio Managers were previously not tiered and had a single minimum share capital, but under the revised minimum capital, Fund/Portfolio Managers have been divided into 3 tiers. Tier 1 being for full scope Portfolio Managers handling large, diversified portfolios, retail funds, and complex instruments) and Tier 2 being for limited scope Fund/Portfolio Managers with narrower mandates. and Tier 3 being for Alternative Investment Fund Managers which includes Private Equity Fund and Venture Capital Fund Manager (Early-stage risk, but lower systemic exposure).

• Tiered Issuing Houses: Issuing Houses have also been tiered with different tiers having different share capitals. Tier 1 Issuing house are for Issuing house offering non-interest finance services, advisory & arrangement services and no underwriting, while tier 2 issuing houses offer a "one stop" shop to issuers, provide underwriting services and render advisory and product development services.

Compliance Timeline

All affected entities are required to fully comply on or before 30^th June, 2027.
Entities that fail to meet the revised capital thresholds within the stipulated period may face regulatory sanctions, including suspension or withdrawal of registration.

The SEC may however consider transitional arrangements on a case-by-case basis upon application.

What this means

• Existing operators should immediately assess capital adequacy gaps and restructuring options.
• New entrants must incorporate the revised capital thresholds into their licensing and business plans.
• Operators in digital assets, fintech, and commodities markets should pay particular attention, as many of these categories now have formal capital benchmarks for the first time.

Revised Capital Requirements