Contributor: Janeth Udoka
Introduction
On 16 January 2026, the Securities and Exchange Commission Nigeria (SEC) issued Circular No. 26-1, revising the minimum capital (MC) requirements applicable to all categories of regulated capital market entities. The Circular is intended to strengthen market resilience, enhance investor protection, align capital adequacy requirements with the evolving risk profile of market activities, and ensure that regulated entities maintain sufficient financial capacity to discharge their obligations on a sustainable basis[1].
This regulatory update provides an analytical overview of the Circular’s objectives, scope, substantive revisions, compliance timelines, and effective date.
Scope of Application.
The revised minimum capital requirements apply across the Nigerian capital market ecosystem, reflecting the SEC’s policy objective of ensuring that all materially active participants maintain adequate financial soundness. The Circular covers core market operators, including issuing houses, brokers, dealers, and fund or portfolio managers, as well as non-core participants such as investment advisers. It also extends to market infrastructure providers, whose operational stability is critical to the integrity and orderly functioning of the market.
In addition, the Circular brings capital market consultants and a range of emerging, technology-driven operators within the regulatory perimeter, thereby addressing oversight gaps arising from sectoral innovation. Notably, the framework expressly includes financial technology operators, Virtual Asset Service Providers, and commodity market intermediaries, each of which is now subject to prescribed minimum capital thresholds and enhanced regulatory obligations commensurate with the nature, scale, and risk profile of their activities[2]. This broadened scope reflects a shift in regulatory approach. The SEC no longer relies solely on traditional classifications of market operators but places greater emphasis on the scale of operations, associated risks, and potential systemic impact. Consequently, operators previously subject to less stringent prudential requirements must now meet capital thresholds aligned with the systemic risk they pose to the market.
The new capital requirements are summarised in the table below[3]:
| S/N | Entities | Previous Minimum Capital (₦) | Previous Minimum Capital (₦) | % Increase |
| 1 | Inter-Dealer Brokers 5 and | 50,000,000 | 2,000,000,000 | 3900% |
| 2 | Issuing Houses (Tier 2) | 200,000,000 | 7,000,000,000 | 3400% |
| 3 | Fund/portfolio Managers (Full Scope) | 150,000,000 | 5,000,000,000 | 3233% |
| 4 | Underwriters | 200,000,000 | 5,000,000,000 | 2400% |
| 5 | Clearing and settlement company | 200,000,000 | 5,000,000,000 | 2400% |
| 6 | Composite Securities Exchange (i.e., exchanges permitted to trade and list all types of securities) | 500,000,000 | 10,000,000,000 | 1900% |
| 7 | Registrars | 150,000,000 | 2,500,000,000 | 1566.67% |
| 8 | Fund/portfolio Managers (Limited Scope) | 150,000,000 | 2,000,000,000 | 1233% |
| 9 | Issuing Houses (Tier 1) | 200,000,000 | 2,000,000,000 | 900% |
| 10 | Venture Capital Fund Managers (Tier 3) | 20,000,000 | 200,000,000 | 900% |
| 11 | Dealers (proprietary trading only) | 100,000,000 | 1,000,000,000 | 900% |
| 12 | Digital Sub-Brokers | 10,000,000 | 100,000,000 | 900% |
| 13 | Corporate Investment Advisers | 5,000,000 | 50,000,000 | 900% |
| 14 | Robo Advisers | 10,000,000 | 100,000,000 | 900% |
| 15 | Non-composite Securities Exchanges (i.e., exchanges where trading is focused on a specific security, commodity, or product) | 500,000,000 | 5,000,000,000 | 900% |
| 16 | Broker-Dealers (client execution, proprietary trading, margin/securities lending, and advisory services) | 300,000,000 | 2,000,000,000 | 566.67% |
| 17 | Trustees | 300,000,000 | 2,000,000,000 | 566.67% |
| 18 | Commodities Broker/Dealers | 10,000,000 | 50,000,000 | 400% |
| 19 | Individual Investment Advisers | 2,000,000 | 10,000,000 | 400% |
| 20 | Digital Assets Exchange (DAX) | 500,000,000 | 2,000,000,000 | 300% |
| 21 | 21 Digital Assets Custodian (DACs) | 500,000,000 | 2,000,000,000 | 300% |
| 22 | Private Equity Fund managers (Tier 3) | 150,000,000 | 500,000,000 | 233% |
| 23 | Brokers (client execution only) | 200,000,000 | 600,000,000 | 200% |
| 24 | Central Counterparties (CCPs) | 5,000,000,000 | 10,000,000,000 | 100% |
| 25 | Digital Assets Offering Platforms (DAOPs) | 500,000,000 | 1,000,000,000 | 100% |
| 26 | Crowd Funding Intermediaries | 100,000,000 | 200,000,000 | 100% |
| 27 | 27 Ancillary Virtual Assets Service Providers | N/A | 300,000,000 | N/A |
| 28 | Digital Assets Intermediaries (DAIs) Platforms (RATOPs) | N/A | 500,000,000 | N/A |
| 29 | 29 Digital Assets Platform Operators | N/A | 500,000,000 | N/A |
| 30 | Real World Asset Tokenisation | N/A | 1,000,000,000 | N/A |
Compliance Timeline and Regulatory Expectations
The SEC has stipulated that the Circular takes immediate effect and requires all affected Capital Market Operators (CMOs) to achieve full compliance by 30 June 2027. Failure to comply within this period may result in regulatory sanctions, including suspension or revocation of registration. The SEC has indicated that transitional arrangements may be granted on a case-by-case basis, subject to satisfactory justification. It is also expected that the SEC will issue supplementary guidelines in due course, outlining compliance procedures and capital verification requirements[4].
Strategic Implications for Capital Market Businesses in Nigeria
The Circular provides an eighteen-month compliance period for regulated CMOs to meet the revised minimum capital thresholds. Firms unable to meet these requirements may consider consolidation strategies, such as mergers or partnerships, while well-capitalized firms may use this period to acquire smaller operators. Such acquisitions enable rapid scaling through existing infrastructure but raise viability concerns for smaller operators.
Operators unable to raise sufficient capital may pursue strategic alliances or transition their service offerings to mitigate licensing risks. Early consideration of exit strategies is advisable, as a timely, structured approach is likely to yield better outcomes than a distressed exit close to the 30 June 2027 compliance deadline.
Conclusion
The issuance of Circular No. 26-1 by the SEC represents a significant recalibration of the regulatory framework governing CMOs in Nigeria, with implications for market structure, competition, and operational sustainability. While the revised minimum capital requirements are expected to enhance market integrity, investor confidence, and systemic resilience, they also impose substantial compliance obligations, particularly on smaller operators.
The transition period leading up to 30 June 2027 will be critical as firms reassess their capital positions, operational models, and strategic direction. The reforms are likely to drive consolidation, strengthen institutional frameworks, and promote a more robust and credible capital market ecosystem, albeit with a more selective and financially resilient pool of participants.
Reference
- Securities and Exchange Commission, ‘Circular Number 26-1 Minimum Capital Requirements’ available at <https://sec.gov.ng/documents/1427/CIRCULAR_Number_26-1._Minimum_Capital_Requirements.pdf> accessed March 2026. ↑
- THE SECURITIES AND EXCHANGE COMMISSION NEW RULES ON MINIMUM CAPITAL REQUIREMENTS FOR CAPITAL MARKET ENTITIES. Article by Dayo Ijagbemi available at https://www.allenandbrooks.com/2026/01/30/the-securities-and-exchange-commission-new-rules-on-minimum-capital-requirements-for-capital-market-entities/ accessed March 2026. ↑
- Please note that this is not an exhaustive list of the relevant entities and increments. SEC Revised the minimum capital requirement for regulated capital market entities. Aluko & Oyebode ALN; available at https://www.aluko-oyebode.com/wp-content/uploads/2026/01/Flashnote-on-SEC-Recapitalisation-Aluko_Oyebode.pdf accessed March 2026. ↑
- REVISED MINIMUM CAPITAL THRESHOLDS FOR CAPITAL MARKET OPERATORS: WHAT MARKET PARTICIPANTS NEED TO KNOW; DUALE. OVIA & ALEX – ADEDIPE available at https://www.doa-law.com/wp-content/uploads/2026/01/Capital-Market-article.pdf accessed March 2024. ↑
