THE Securities and Exchange Commission (SEC) has revised the minimum capital requirements for all categories of regulated capital market operators, marking the first major update in over 10 years. The commission has set a compliance deadline of June 30, 2027, a move widely expected to trigger mergers and acquisitions across the sector.

According to the SEC, the updated minimum capital framework was targeted at strengthening the resilience of the market, enhancing investor protection, and aligning capital adequacy with the growing risk profiles of market activities. The regulator emphasised that the review would ensure that entities maintained sufficient financial capacity to meet their obligations sustainably.

Dr. Emomotimi Agama, DG, SEC

“The revised framework is designed to improve the financial soundness and operational resilience of market operators, align capital requirements with the complexity and risk exposure of regulated activities, support market stability, and facilitate innovation in emerging segments such as digital assets and commodities markets,” the SEC said in a circular dated January 16.

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The circular, addressed to all SEC-regulated entities, covered a broad range of operators, including core and non-core capital market players, market infrastructure institutions, capital market consultants, FinTech firms, Virtual Asset Service Providers (VASPs), and commodity market intermediaries.

Entities that fail to meet the new capital thresholds by the June 2027 deadline may face regulatory sanctions, including suspension or revocation of registration, the SEC warned.

Portfolio Managers

Tier-1 portfolio managers (full scope) handling collective investment schemes (CIS), alternative investment funds, or private portfolios with net asset values (NAV) exceeding N20 billion are now required to maintain a minimum capital of N5 billion, up from N150 million. Funds and portfolio managers with NAV/AuM above N100 billion must hold at least 10 percent of the NAV/AuM as capital.

Also, Tier-2 portfolio managers (limited scope), managing smaller pooled funds or discretionary portfolios not exceeding N20 billion NAV and with limited foreign exposure, must now maintain N2 billion in capital, compared with the previous N150 million.

Issuing houses

Issuing houses have also seen a sharp increase in capital requirements. Tier-1 issuing houses, offering non-interest finance services, advisory, and arrangement services, now require N2 billion in capital, up from N200 million. Tier-2 issuing houses, on the other hand, which provide underwriting and a comprehensive suite of issuer services, must hold N7 billion in capital, up from N200 million.

Brokerage and dealer services

Minimum capital thresholds for brokers and dealers have also risen significantly. Client-execution-only brokers now require N600 million (up from N200 million), proprietary trading dealers need N1 billion (up from N100 million), and full-service broker-dealers must maintain N2 billion (up from N300 million). Sub-brokers face new requirements as well: digital sub-brokers need N100 million, corporate sub-brokers require N50 million, while individual sub-brokers must have N10 million as minimum capital. Inter-dealer brokers must now maintain N2 billion, up from N50 million.

The SEC stressed that these revisions, increasing capital from historic lows last set in 2015, were in line with its mandate under the Investments and Securities Act, 2025, to regulate and develop the Nigerian capital market.