How SEC’s Revised Capital Thresholds Will Reshape Nigeria’s Markets

Nigeria’s capital market is entering a decisive moment. With a sweeping upward revision of minimum capital requirements, the Securities and Exchange Commission (SEC) has launched its most consequential regulatory overhaul in more than a decade, one that will fundamentally reorder who can operate, who must consolidate and who may be forced to exit. Framed as a push for resilience and global alignment, the new rules raise the bar for credibility and scale across the market, but they also expose deep fault lines for local operators already grappling with funding constraints and macroeconomic volatility.

The new framework, contained in Circular No. 26-1 dated January 16, 2026 and issued pursuant to the Investments and Securities Act (ISA) 2025, represents the first comprehensive adjustment to capital adequacy standards since 2015. It cuts across virtually every segment of the market, from traditional brokerage firms and fund managers to fintech operators, market infrastructure providers and digital asset platforms.

At its core, the reform is about scale, risk and credibility. According to the SEC, the revised thresholds are designed to enhance the financial strength and operational resilience of regulated entities, reduce systemic risk and ensure that operators have sufficient capacity to meet their obligations on a sustainable basis. The Commission has also framed the policy as a way to support innovation and orderly development, particularly in fast-growing segments such as digital assets and commodities trading.

But beyond the policy intent lies a deeper structural consequence: the emergence of a new capital order that will likely reshape Nigeria’s capital market through consolidation, exits and strategic realignments.

Under the new rules, minimum capital requirements have risen sharply across most operator categories, signalling the end of the era of lightly capitalised intermediaries.

For brokerage and dealing firms, the increases are particularly significant. Brokers offering client execution services must now maintain a minimum capital base of N600m, up from N200m. Dealers engaged solely in proprietary trading are required to hold N1bn, while broker-dealers combining execution, proprietary trading, margin lending and advisory services must now meet a N2bn threshold,which isbmore than six times the previous N300m requirement.

Digital sub-brokers must now hold M100m, while corporate sub-brokers are required to maintain N50m, compared with just N10m previously.

The most striking shift, however, is in the regulation of digital asset operators. In a clear signal of intent to fully mainstream virtual assets within Nigeria’s regulatory perimeter, the SEC has imposed substantially higher capital requirements on Virtual Asset Service Providers (VASPs).

Digital Asset Exchanges and Digital Asset Custodians must now maintain N2bn each, up from N500m, Other operators such as Digital Assets Offering Platforms, Digital Assets Intermediaries and Real-World Assets Tokenisation Platforms are required to hold between N500m and N1bn, depending on the scope of activities, while ancillary providers must maintain at least N300m.

Fintech operators have also been caught in the dragnet.Robo-advisers now face a minimum capital requirement of N100m, a tenfold increase from N10m, while crowdfunding intermediaries must raise their capital base to N200m from N100m

For fund and portfolio managers, the changes are transformational. Full-scope portfolio managers overseeing collective investment schemes and alternative investment funds with large assets under management must now maintain N5bn in capital, up from N150m. Limited-scope managers are required to hold N2bn, while private equity and venture capital fund managers must meet thresholds of N500 million and N200m respectively.

Market infrastructure providers are subject to equally ambitious benchmarks. Composite securities exchanges must now maintain N10bn in capital, non-composite exchanges N5bn, Central Counterparties N10bn, and Clearing and Settlement Companies N5bn.

All affected entities have been directed to comply with the new requirements on or before June 30, 2027, with the SEC warning that failure to do so could result in sanctions, including suspension or withdrawal of registration.

A Global Standard, Local Test

From an international perspective, the SEC’s move is not unusual. According to Professor Uche Uwaleke Professor of Capital Market and President of the Capital Market Academics of Nigeria, the 18-month compliance window is defensible by global standards.

“Globally, regulatory-driven recapitalisation of capital market intermediaries typically allows between 12 and 24 months,” Uwaleke notes, citing examples from the EU and UK investment-firm prudential reforms, as well as India and South Africa, where stockbrokers and intermediaries were given similar timelines depending on size and activity.

Seen against this backdrop, Nigeria’s June 2027 deadline is broadly aligned with international practice. However, he argued that alignment on paper does not automatically translate to ease of execution.

“The adequacy of timelines depends less on the headline date and more on local market realities,” Uwaleke argues.

Those realities are sobering. Many capital market operators in Nigeria are privately owned, thinly capitalised and operate in an environment characterised by high interest rates, currency volatility and limited access to long-term funding. For such firms, recapitalisation is not a simple accounting exercise but a complex, time-consuming process involving valuation, due diligence, regulatory approvals and actual capital raising.

This makes the new regime relatively manageable for large, well-capitalised firms particularly those with foreign backing or diversified income streams but deeply challenging for small and mid-tier operators.

Consolidation As The Unspoken Objective

The inevitable outcome of this divergence is consolidation. As weaker firms struggle to raise fresh capital, mergers, acquisitions and strategic partnerships are likely to accelerate. Some operators may exit the market altogether.

For many analysts, this is not an unintended side effect but an implicit policy objective. Nigeria’s capital market remains fragmented, with numerous small players whose scale limits investment in technology, risk management and human capital. By raising the capital bar, the SEC is effectively forcing a restructuring that could result in fewer but stronger intermediaries.

“This is likely to accelerate consolidation, which appears to be the intended policy outcome,” Uwaleke observed.

If well managed, consolidation could enhance market stability, improve service quality and strengthen investor confidence. Poorly managed, it could trigger disorderly exits, job losses and short-term disruptions.

Implementation To Decide Outcome

The success of the new capital order will ultimately hinge on how the SEC implements it. Clear and early guidance on compliance modalities is essential, particularly on what qualifies as eligible capital, how group structures will be treated and the mechanics of capital verification.

Uwaleke recommends a phased or tiered approach, with interim milestones that allow both regulators and operators to track progress. Experience from other jurisdictions suggests that such milestones help distinguish between firms making genuine good-faith efforts and those simply delaying the inevitable.

Equally important is regulatory agility. Fast-tracked approvals for mergers, acquisitions and strategic investments could make the difference between orderly consolidation and chaotic market exits. Limited regulatory forbearance for firms that demonstrate credible progress toward compliance—without diluting standards—could also improve overall outcomes.

The SEC’s revised capital thresholds mark a turning point for Nigeria’s capital market. The framework is internationally consistent and policy-credible, but domestically tight. It raises the cost of participation, but also promises a more resilient and credible market architecture.

As the countdown to June 2027 begins, operators face stark choices: raise capital, merge, pivot or exit. For regulators, the challenge is to manage the transition in a way that balances market stability, investor protection and orderly restructuring.

In this emerging capital order, the rules have changed. How well the market adapts will define Nigeria’s investment landscape for years to come.