NIGERIA’S REVISED MINIMUM CAPITAL REQUIREMENTS: WHAT HAS CHANGED AND WHY IT MATTERS.

The Securities and Exchange Commission (“the Commission”) has issued a Circular (“the Circular”) titled “Revised Minimum Capital (MC) for Regulated Capital Market Entities. The Circular states revised MC thresholds; the SEC has indicated it will issue separate guidance on compliance modalities and capital verification (including composition/measurement). The Circular No. 26-1, dated 16^th January 2026, essentially revises the Minimum Capital (MC) Requirements applicable to all categories of SEC-regulated capital market entities and replaces the capital regime that has been in place since 2015. It takes effect from the date of publication, with a compliance deadline of 30 June 2027.

Issued pursuant to the SEC’s statutory mandate under the Investments and Securities Act 2025 (including its general supervisory and rule-making powers), the Circular reflects the Commission’s exercise of its express rule-making, supervisory, and prudential regulatory powers over the Nigerian capital market.

Particularly, the ISA empowers the SEC to;

• regulate and develop the capital market in order to maintain fair, efficient, and transparent markets;
• make rules, regulations, and guidelines for the orderly operation and conduct of capital market activities;
• register, regulate, supervise, and impose prudential standards on capital market operators; and
• prescribe capital adequacy, financial soundness, and risk management requirements for regulated entities, as the Commission considers necessary for investor protection and systemic stability.

The revised Minimum Capital Requirements are therefore grounded in the SEC’s statutory authority to set and periodically review prudential thresholds applicable to capital market operators.

The revised framework affects a broad range of operators, including brokers, dealers, fund and portfolio managers, issuing houses, market infrastructure institutions, commodity market intermediaries, and certain technology-enabled market participants.

This Newsletter highlights what has changed, why it matters, and what market participants should be thinking about as the new regime takes effect.

Why the SEC Revised the Capital Framework

In exercising its powers under the ISA, the SEC periodically reviews regulatory and prudential requirements to ensure that they remain aligned with market realities and evolving risk profiles.

According to the SEC, the revised Minimum Capital Requirements are driven by the need to enhance the financial soundness and operational resilience of market operators, align capital thresholds with the scope, complexity, and risk exposure of regulated activities, promote market stability and systemic risk mitigation, and support innovation and the orderly development of emerging market segments, including digital assets and commodity markets.

In essence, the Commission is recalibrating capital adequacy standards to reflect today’s market dynamics, including increased sophistication, technology-driven services, and greater interconnectedness across financial markets.

Key Highlights of the Revised Minimum Capital Requirements

The Circular implements a broad upward recalibration across core operators (brokers, dealers, broker-dealers, sub-brokers and inter-dealer brokers), fund/portfolio managers (now tiered), non-core operators (issuing houses, underwriters, registrars, trustees and rating agencies), market infrastructure (CCP, clearing/settlement and exchanges),fintech-enabled market operators (robo advisers and crowdfunding intermediaries), virtual asset service providers,and commodity market intermediaries (including CMCs and warehousing operators).

The following highlights the key changes to the MC requirements.

1. Significant Upward Review Across Core Market Functions;Capital requirements for brokers, dealers, and broker-dealers have increased substantially, reflecting the SEC’s intention to align financial thresholds with the scale, riskprofile, and systemic relevance of regulated trading and intermediation activities.

For example:

1. Brokers (client execution only) now require ₦600 million, up from ₦200 million;
2. Dealers (proprietary trading only): ₦1 billion, increased from ₦100 million
3. Broker-dealers now require ₦2 billion, compared to ₦300 million previously; and
4. Inter-dealer brokers now require ₦2 billion, up from ₦50 million.

Sub-Broker Categories

The Circular also introduces differentiated capital requirements for sub-brokers, recognizing their expanding role in distribution, client onboarding, and technology-enabled access to the capital market:

• Digital Sub-Brokers: ₦100 million
• Corporate Sub-Brokers: ₦50 million
• Individual Sub-Brokers: ₦10 million

2. Tiered Structure for Fund and Portfolio Managers; The SEC has introduced a more risk-sensitive, tiered framework for fund and portfolio managers, with capital levels tied to Assets under Management (AuM), Net Asset Value (NAV), and the scope of regulated activities. Under the revised framework:

1. Tier 1 (Full Scope Fund/Portfolio Managers): minimum capital requirement of from ₦5 billion.
2. Tier 2 (Limited Scope Fund/Portfolio Managers): minimum capital requirement of from ₦2 billion.
3. Tier 3 (Alternative Investment Fund Managers);
   1. Private Equity Fund Managers: ₦500 million
   2. Venture Capital Fund Managers: ₦200 million

In addition, any fund portfolio manager with Net Asset Value (NAV) or Assets under Management (AuM) exceeding ₦100 billion is required to maintain minimum capital equivalent to 10% of its NAV or AuM, as applicable.

3. Higher Thresholds for Non-Core Market Operators;Capital requirements for non-core market operators have been materially increased to reflect their critical role in safeguarding market integrity, investor confidence, and systemic stability.

For clarity, the revised minimum capital thresholds include:

• Tier 1 (without underwriting): ₦2 billion
• Issuing Houses with underwriting functions: ₦7 billion
• Underwriters: ₦5 billion
• Registrars: ₦2.5 billion
• Trustees: ₦2 billion

In addition to operator-focused requirements, the Circular also strengthens the capital base of key market infrastructure institutions, reflecting their systemic importance to market stability and orderly trading.

The revised thresholds include:

• Central Counter Party (CCP): ₦10 billion
• Clearing and Settlement Companies: ₦5 billion
• Composite Securities Exchange: ₦10 billion
• Non-Composite Securities Exchanges: ₦5 billion

4. Fintechs and Virtual Asset Service Providers;The Circular also introduces revised capital thresholds for certain technology-enabled operators, including robo-advisers, crowdfunding intermediaries, and digital asset service providers.

It is important to clarify that the SEC’s jurisdiction over fintech’s is not general in nature. To eliminate uncertainty, the Circular expressly prescribes minimum capital thresholds for the following regulated fintech activities:

1. Robo Adviser: ₦100 million
2. Crowd Funding Intermediary: ₦200 million
3. Virtual Asset Service Providers:
   1. Ancillary Virtual Assets Service Providers (AVASPs)- ₦300 million
   1. Digital Assets Offering Platforms (DAOPs): ₦1 billion
   1. Digital Asset Intermediary (DAI): ₦500 million
   1. Digital Assets Platform Operator (DAPO) (including Token issuers): ₦500 million
   1. Real-world Assets Tokenization Offering Platform (RATOP): ₦1 billion
   1. Digital Assets Exchange (DAX): ₦2 billion
   1. Digital Assets Custodian: ₦2 billion

These calibrated thresholds reflect the SECs risk-based approach to regulating technology-enabled capital market activities, ensuring that entities operating within higher-risk segments of the digital asset ecosystem maintain commensurate financial buffers.

5. Expanded Coverage of Commodity Market Intermediaries

The revised Minimum Capital Requirements significantly expand and refine the regulatory framework for commodity market intermediaries. The SEC has adopted a more differentiated, activity-based approach designed to strengthen transparency, enhance market confidence, and improve risk management across commodities ecosystems.

Commodity Market Intermediaries

Under the revised framework, minimum capital thresholds apply as follows:

1. Collateral Management Company (CMC)
   1. Tier 1 (Local/Regional Operations): ₦200 million
   2. Tier 2 (National/International reach): ₦500 million
   3. Warehousing Operators: ₦500 million

2. Commodity Brokers and Dealers
   1. Commodities Broker/Dealer: ₦50 million
   2. Commodities Broker: ₦30 million
   3. Commodities Dealer: ₦20 million

3. Other Regulated Entities
   1. Custodians of Securities (Banks) and Dealing Member Banks: capital requirements are as prescribed by the Central Bank of Nigeria (CBN), rather than fixed by the SEC.
   2. Non-Bank Custodians: minimum capital of ₦50 billion, plus an additional 0.1% of Assets Under Custody (AUC).
   3. Nominee Companies: ₦5 million

These carve-outs reflect the SEC’s recognition of overlapping regulatory mandates and the need to align prudential requirements with existing sector-specific supervisory frameworks.

Timeline and Compliance Expectations

All affected entities are required to comply with the revised Minimum Capital Requirements on or before 30 June 2027. The SEC may, upon application and on a case-by-case basis, consider transitional arrangements to be justified, and has stated that detailed guidance on compliance modalities and capital verification will be issued separately. Entities that fail to meet the prescribed thresholds within the stipulated timeline risk regulatory sanctions, including suspension or withdrawal of registration.

Why This Matters for Market Participants

The revised framework is expected to reshape the competitive landscape of Nigeria’s capital market. While stronger capital buffers enhance market stability and investor confidence, smaller or undercapitalized operators may face consolidation pressures, restructuring, or the need for strategic partnerships.

For clients and investors, the reforms signal a more resilient and better-capitalized regulatory environment. For market operators, early planning whether through capital injections, restructuring, or regulatory engagement will be critical to navigating the transition effectively.

Conclusively, The SEC has indicated that further guidance on compliance modalities and capital verification processes will be issued in due course. Market participants are encouraged to undertake early internal assessments and seek professional advice where necessary to ensure timely and efficient compliance.