Legal Opinion - ISA 2025

Practical Implications of the Investments and Securities Act 2025

Introduction

Corporate law in Nigeria is set to experience a significant shift with the signing into law of the Investments and Securities Act 2025 ("ISA 2025"). This Act repeals the previous Investment and Securities Act of 2007 and introduces comprehensive reforms aimed at strengthening market regulation, investor protection, and further aligning Nigeria’s capital market framework with global standards.

Key Provisions

1. Expanded Powers and Independence of the Securities and Exchange Commission (SEC)

The SEC is now unequivocally recognized as the apex regulator for the Nigerian capital market, with clear statutory affirmation of its independence—limiting undue governmental interference in its regulatory role. This translates to enhanced regulatory certainty, bolstering investor confidence and aligning Nigerian practice with international standards like the International Organization of Securities Commission (IOSCO) principles.

2. Investor Protection and Market Integrity

The ISA 2025 imposes stiffer penalties for market abuses and regulatory infractions, reinforcing the SEC’s enforcement powers. 

It also expands investor protection via enhanced regulatory and supervisory frameworks, including stricter regulations for mergers, acquisitions, and public offers providing reduced systemic risk, increased market transparency, and safer participation for investors.

3. Digital Assets

The Act gives Legal Recognition to digital assets by expanding the definition of “securities” in Nigeria to include cryptocurrencies. It goes further and explicitly provides for the registration and supervision of virtual asset service providers and exchanges addressing previous regulatory uncertainty in that space and positioning the country as a hub for digital finance in Africa.

4. Alignment with Global Best Practices

Ultimately, through the adoption of international best practices and explicit provisions for accommodating new investment vehicles and digital assets, ISA 2025 opens up the playing field to both local and foreign participants to foster innovation and economic growth by improving market transparency and operational standards.

Corporate Entities

As a direct consequence of the ISA 2025, companies and financial institutions must promptly review and revise their compliance frameworks to align with the expanded regulatory requirements of the SEC which must include enhanced disclosures for digital assets, ESG (Environmental, Social, and Governance) reporting, and stricter corporate governance rules.

Directors, compliance officers, and legal counsel must also become familiar with the expanded enforcement and investigative authority of the SEC and adopt proactive risk management strategies.

To Conclude

ISA 2025 constitutes a landmark reform in Nigerian corporate law. Its reinforcement of the SEC’s independence, introduction of digital asset regulation and heightened investor protection mechanisms represent a comprehensive modernization of Nigeria’s capital market laws. Still, the true test will lie in robust and consistent implementation, effective stakeholder engagement, and capacity-building within regulatory and compliance functions.