The Securities and Exchange Commission (“the Commission”), exercising its statutory mandate under the Investments and Securities Act, 2025, has issued Circular No. 26-1 on 16 January 2026, introducing revised Minimum Capital requirements for all regulated capital market entities in Nigeria. This revision represents a strategic regulatory intervention aimed at strengthening the resilience and systemic stability of the Nigerian capital market, enhancing investor protection, and ensuring that the capital adequacy of regulated entities is commensurate with the evolving scale, complexity, and risk profile of their operations. Furthermore, the update is designed to support the orderly development and regulation of emerging market segments, including digital assets and commodities markets, thereby promoting innovation within a stable, robust and prudentially sound regulatory environment.
The revised Minimum Capital requirement applies across the full spectrum of entities regulated by the Commission, encompassing both core and non-core capital-market operators. These include, among others, brokers, dealers, sub-brokers, fund managers, and issuing houses. The framework also extends to market infrastructure institutions, including exchanges, clearing houses, and trade repositories, as well as capital market consultants, financial technology operators, virtual asset service providers (VASPs), and commodity market intermediaries.
Key Changes in Minimum Capital (MC) Requirements
| Regulated Entities | Revised MC (NGN) |
| A. Brokage Services | |
| Broker (client execution only) | 600 million |
| Dealer (proprietary trading only) | 1 billion |
| Broker-Dealer (client execution, proprietary trading, margin/securities lending and advisory services) | 2 billion |
| B. Fund/Portfolio Management Services | |
| Tier 1- Portfolio Managers (Full Scope) | 5 billion |
| Tier 2- Fund/Portfolio Managers (Limited Scope) | 2 billion |
| Tier 3- Alternative Investment Managers | |
| Private Equity Fund Manager | 500 million |
| Venture Capital Fund Manager | 200 million |
| Issuing House | |
| Tier 1- Issuing House | 2 billion |
| Tier 2- Issuing House with Underwriting | 7 billion |
| Rating Agency | 500 million |
| Registrar | 2.5 billion |
| Trustees | 5 billion |
| Underwriters | 50 billion |
| Investment Adviser (Corporate) | 50 million |
| Investment Adviser (Individual) | 10 million |
| C. Market Infrastructure | |
| Central Counter Party (CCP) | 10 billion |
| Clearing and Settlement Company (CSC) | 5 billion |
| Composite Securities Exchange 5.00 billion (Trading and Listing of all types of securities) | 10 billion |
| Non-Composite Securities Exchange (Focus on a single type of security, commodity, or financial product) | 5 billion |
| D. Fintechs | |
| Robo Adviser | 100 million |
| Crowd Funding Intermediary | 200 million |
| E. Virtual Asset Service Providers | |
| Ancillary Virtual Assets Service Providers | 300 million |
| Digital Assets Offering Platform (DAOP) | 1 billion |
| Digital Assets Intermediary (DAI) | 500 million |
| Digital Assets Platform Operator (DAPO) (including Token issuers) | 500million |
| Digital Assets Exchange (DAX) | 2 billion |
| Digital Assets Custodian | 2 billion |
| Real-world Assets Tokenization and Offering Platform (RATOP) | 1 billion |
| F. Commodity Market Infrastructure | |
| Tier 1 – Local/ Regional Operations Collateral Management Company (CMC) | 200 million |
| Tier 2 – National/International reach Collateral Management Company (CMC) | 500 million |
| Commodities Broker/Dealer | 50 million |
| Commodities Broker | 30 million |
| Commodities Dealer | 20 million |
| Warehousing Operators | 500 million |
Compliance Timeline and Requirements
For many operators, the immediate regulatory risk is a capital gap. That is, a shortfall between current regulatory capital and the new minimum requirements which, if not identified and addressed promptly, may constrain strategic options and compress implementation timelines. Against this backdrop, the Commission has prescribed a definitive compliance timeline, requiring all capital-market operators and other regulated entities affected by the revised Minimum Capital framework to achieve full compliance on or before 30 June 2027.
Recognizing that certain entities may require additional time to restructure or raise capital, the Commission has indicated that it may, upon formal application and on a case-by-case basis, consider transitional arrangements where such requests are properly justified and supported by a credible compliance plan. However, such relief is discretionary, not automatic, and does not obviate the obligation to ultimately meet the revised Minimum Capital requirement.
Entities that fail to meet the prescribed requirements within the stipulated timeline face significant operational continuity risk. Post-deadline non-compliance may attract regulatory sanctions, including the suspension or withdrawal of registration, as determined by the Commission. Beyond regulatory enforcement, affected entities may also experience reputational exposure, disruption to business activities, and loss of investor and counterparty confidence, underscoring the importance of proactive and timely compliance planning.
Implications of the Revised Minimum Capital Framework and Compliance Considerations for Smaller Entities
The revised Minimum Capital requirements mark a material shift in the capital market regulatory landscape, with particularly significant implications for small, emerging, and growth-stage regulated entities. For many of these organization’s, the new thresholds represent a substantial increase over prior capital requirements and may exert immediate pressure on existing capital structures, funding capacity, and operational sustainability. Entities operating lean business models or within specialized or niche segments such as sub-brokerage, boutique fund management, FinTech services, virtual asset operations, and commodity intermediation may find that their current capital no longer aligns with the revised regulatory expectations, thereby necessitating strategic reassessment to remain compliant.
Beyond the direct financial impact, the revised framework is likely to influence how smaller entities structure and deliver their services. Many may need to reconsider the scope of their licensed activities, rationalise product offerings, streamline operations, or reposition within lower regulatory tiers (where available), in order to align risk exposure with capital capacity. In some cases, the heightened capital requirements may accelerate industry consolidation, as smaller firms explore mergers, strategic partnerships, or equity participation as viable pathways to compliance. While this may reduce the number of standalone operators, it is expected to strengthen overall market integrity by promoting better-capitalized and more resilient institutions.
In responding to these changes, affected entities should adopt a proactive and deliberate approach to compliance. This begins with a clear assessment of current capital positions against the revised requirements, followed by the development of a realistic capital-raising or restructuring strategy where gaps exist. Entities should also consider engaging the Commission early, particularly where transitional arrangements may be justified, and ensure that governance, risk management, and regulatory reporting frameworks are strengthened in line with the regulator’s supervisory expectations. Collectively, these steps will be critical to preserving operational continuity and supporting long-term sustainability under the new capital regime.
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The content of this Article was published by DealHQ’s Capital Markets Practice Team. It is not intended to replace professional legal advice. It merely provides general information to the public on the subject matter.
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