The Securities and Exchange Commission (SEC) of Nigeria has ignited a firestorm within the financial services ecosystem by proposing a massive upward revision of minimum capital requirements for capital market operators (CMOs).
While the SEC in the circular dated January 16, 2026, argues the move is necessary to promote market stability and “mitigate” against systemic risks, industry critics and fintech innovators warn that the directive could stifle growth and innovation and lead to a wave of forced closures.
The Scale of the New Requirements
The proposed hikes are significant, in some cases increasing the capital floor by over 300% to 500%. This mirrors the Central Bank of Nigeria’s (CBN) aggressive recapitalization of the banking sector, suggesting a coordination across the entire Nigerian financial landscape.
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Issuing House (with no underwriting): Expected to jump from ₦200 million to potentially ₦2 billion. For those that undertake underwriting, the new capital requirements go from N200 million to N7 billion.
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Broker-Dealers: Facing a hike from ₦300 million to ₦2 billion. For brokers alone (client execution only) it goes to N600 million and dealers (prop trading) new minimum capital requirements is now N1 billion.
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Fund Managers: The minimum Capital for Full Scope Fund Managers (with Net Asset Value above N20 billion) is moving from ₦150 million to ₦5 billion. Also any Fund Manager with NAV/AuM of more than N100 billion is expected to have a minimum of 10% of the NAV/AuM as capital.
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Digital Sub-Brokers: Digital Asset Offering Platforms minimum capital doubles to N1 billion from N500 million. For digital exchanges its N2 billion and digital asset custodians its N2 billion. For many fintechs that only recently entered the market, these new requirements represent a massive barrier to entry.
- Rating Agencies/ Registrars: Minimum capital for rating agencies goes from N150 million to N500 million. For registrars it moves to N2.5 billion.
- Trustees: Minimum capital for Trustees moves to N2 billion from N300 million previously.
All affected entities are required to comply with the revised Minimum Capital Requirement on or before 30 June 2027, according to SEC.
“Entities that fail to meet the prescribed requirements within the stipulated timeline shall be subject to appropriate regulatory sanctions, including suspension or withdrawal of registration,” SEC Nigeria said.
Nigeria Sec set to Harm Growth and Innovation in Capital Markets
Industry advocate have voiced concerns that the move by the regulator is misguided as it will harm innovation and growth of the market.
“Nigerian regulators don’t understand capital. For instance if this regulation stands it means an Asset Manager like Stanbic Asset Management will now be required to have more capital than the bank, even though its assets are held by a Custodian,” a capital market industry player told MoneyCentral.
“They have forced everyone to hold assets with custodians, so the risk is really with the custodians.”
Many digital investment apps (Wealthtech) that have democratized stock trading and asset investment for millions of young Nigerians may also find it impossible to raise this level of capital, potentially leading to a “tech-exit” or forced mergers.
A smaller number of operators could lead to higher transaction fees for retail investors and less incentive for firms to innovate in user experience or specialized investment products.
Market operators tell MoneyCentral that unlike the banking sector, where mergers are common, many smaller boutique firms may simply choose to liquidate, leading to job losses and a “brain drain” of specialized market talent.
“In Europe you need 150,000 Euros to run a UCIT (Undertaking for Collective Investments or Transferrable Securities), no where in the OECD do you need more than 350,000 Euros for anything. But in Nigeria, you need $1.5 million because AuM is the biggest in the world?,” a second market watcher asked incredulously.
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