SEC raises capital bar for brokers, fund managers. Top tier N5bn from ₦150m

Nigeria’s capital market operators are facing their most sweeping regulatory reset in more than a decade, after the Securities and Exchange Commission (SEC) sharply raised minimum capital requirements across every segment of the market.

The move could accelerate consolidation and push weaker players to the margins.

In a circular issued on Friday, the SEC said the new capital thresholds are designed to strengthen market resilience, protect investors and bring capital adequacy in line with the growing complexity and risk profile of Nigeria’s financial markets, including exposure to foreign assets, digital finance and commodities trading.

The last comprehensive capital review was carried out in 2015.

“This review is informed by the need 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,” SEC said.

Under the new framework, top-tier portfolio and fund managers overseeing large pools of capital will face the steepest increases.

Tier-1 portfolio managers managing more than ₦20 billion in assets – or with significant foreign exposure – must now maintain a minimum capital base of ₦5 billion, up from just ₦150 million previously.

For firms managing over ₦100 billion, the SEC is mandating capital equal to at least 10 percent of assets under management.

Broker-dealers offering full-service operations – including proprietary trading, margin lending and advisory services – will now require ₦2 billion in capital, compared with ₦300 million under the old rules. Issuing houses and dealers have also seen sharp upward revisions, with Tier-2 issuing houses that underwrite securities now required to hold ₦7 billion, up from ₦200 million.

Even smaller players are not spared. Minimum capital for brokers focused solely on client execution has tripled to ₦600 million, while digital sub-brokers now require ₦100 million, ten times the previous threshold.

The SEC said all regulated entities must comply by June 30, 2027, warning that failure could result in suspension or outright withdrawal of registration.

Policy Shift

Behind the policy shift is a broader concern that thinly capitalised firms pose systemic risks in a market that has grown more complex, more interconnected and more exposed to shocks.

The Commission said the review is aligned with its expanded mandate under the Investments and Securities Act 2025, particularly as Nigeria positions itself for deeper institutional participation and new asset classes.

But the changes are likely to trigger significant restructuring. Smaller firms may be forced into mergers, acquisitions or exit, while well-capitalised operators stand to gain market share.

For investors, the SEC is betting that fewer but stronger intermediaries will improve confidence in Nigeria’s capital markets – even if the transition proves painful for parts of the industry.