Analysis Of SEC’s Circular On Revised Minimum Capital For Regulated Capital Market Entities under Investment & Securities Act 2007

For the first time in a decade, the Securities and Exchange Commission has completely overhauled how much capital operators in Nigeria’s capital market need to hold just to stay in business. If you run a brokerage firm, manage funds, operate a digital asset platform, or provide any SEC-regulated service, this isn’t a minor regulatory update you can skim past. Some categories are looking at capital increases exceeding 3,000%, and the compliance clock is already running.
This article breaks down exactly what SEC’s Circular No. 26-1 changed, who it affects, the numbers that matter most, and a significant correction the Commission had to walk back within days of publishing.
What The Circular Actually Is
On 16 January 2026, SEC issued Circular No. 26-1, revising the Minimum Capital (MC) requirements applicable to all categories of entities it regulates, replacing the capital regime that had been in place since 2015. It was issued pursuant to the Commission’s statutory mandate under the newly enacted Investments and Securities Act, 2025, and, as a form of subordinate legislation, it carries binding regulatory force.
According to SEC, the revision is intended to strengthen the financial soundness of market operators, align capital requirements with the actual risk and complexity of their activities, promote market stability, and support the orderly growth of newer market segments, including digital assets and commodities.
Who Does This Affect?
The Circular casts a genuinely wide net, applying to core and non-core capital market operators, market infrastructure institutions, capital market consultants, fintech operators, Virtual Asset Service Providers, and commodity market intermediaries. In practice, this means brokers, dealers, fund managers, issuing houses, registrars, trustees, underwriters, securities exchanges, crypto exchanges and custodians, robo-advisers, and commodities brokers all fall within scope, whether they’re already licensed, currently applying for registration, or somewhere in between.
The Numbers That Matter Most
The scale of these increases is genuinely striking. A few examples illustrate just how significant this shift is:
Brokerage Services: A Broker (client execution only) moves from ₦200 million to ₦600 million, while a Broker-Dealer offering full services jumps from ₦300 million to ₦2 billion. An Inter-Dealer Broker sees perhaps the steepest single jump, from ₦50 million to ₦2 billion.
Fund And Portfolio Management: Tier 1 Fund/Portfolio Managers (handling the largest, most complex portfolios) move from ₦150 million to ₦5 billion, while Tier 2 managers move to ₦2 billion.
Issuing Houses: A Tier 2 Issuing House offering underwriting services sees its requirement rise from ₦200 million to ₦7 billion, one of the largest absolute increases in the entire framework.
Market Infrastructure: A Composite Securities Exchange moves from ₦500 million to ₦10 billion, and Clearing and Settlement Companies move from ₦200 million to ₦5 billion.
Virtual Asset Service Providers: This is genuinely new territory. Categories like Ancillary VASPs, Digital Asset Intermediaries, and Digital Asset Platform Operators, which previously had no prescribed capital threshold at all, are now required to hold between ₦300 million and ₦1 billion, while Digital Asset Exchanges and Custodians move to ₦2 billion.
Beyond individual categories, one detail worth flagging is the disappearance of “Receiving Banker (Banker to an Issue)” from the revised framework entirely, listed as “N/A” where it previously carried a ₦200 million requirement. SEC hasn’t yet clarified whether this function is being phased out, folded into issuing house or underwriter licences, or handled some other way, so affected banks should watch for further guidance.
The AUM Correction You Need To Know About
Here’s where things got genuinely tense in the days after the Circular was published. The original text stated that any Fund and Portfolio Manager with a Net Asset Value or Assets Under Management above ₦100 billion would need to hold capital equal to 10% of that NAV or AUM, in addition to the base Tier 1 requirement.
To put that in perspective, a fund manager overseeing ₦4 trillion in assets would, under a literal reading, have needed to raise ₦400 billion in regulatory capital, an amount exceeding the capital base of several of Nigeria’s regional banks. Industry stakeholders pushed back hard, arguing the rule fundamentally misunderstood the fiduciary nature of asset management, where managers hold client funds in trust rather than take them on as principal risk, unlike a bank.
Within days, SEC clarified that the correct figure was 0.1% of AUM, not 10%, a hundredfold difference that dramatically eases the burden on Nigeria’s largest asset managers while still requiring meaningful additional capital as portfolios scale. Everything else in the Circular, including the fixed capital figures for brokers, issuing houses, market infrastructure, and digital asset operators, remains unchanged.
Friendly Advice: If your organization is a large fund manager, don’t rely on secondhand summaries of this Circular, including this one, without confirming the current figure directly from SEC’s published guidance. As this correction shows, a hundredfold typo in a regulatory circular is exactly the kind of detail that can upend a compliance budget overnight.
Compliance Timeline
The Circular takes effect immediately from its date of publication, but SEC has given the market genuine runway to adjust: all affected entities must comply with the revised capital requirements on or before 30 June 2027. Entities that fail to meet the new thresholds by that date face regulatory sanctions, including suspension or outright withdrawal of registration. SEC has also indicated it may consider transitional arrangements on a case-by-case basis, with detailed guidance on compliance modalities and capital verification to follow separately.
What This Means For The Market
The scale of these increases is expected to reshape Nigeria’s capital market in a few predictable ways. Smaller operators, particularly sub-brokers, individual investment advisers, and lower-tier fund managers, are likely to pursue mergers, acquisitions, or exit the market entirely rather than raise fresh capital, which aligns with SEC’s apparent goal of fewer but more resilient operators. At the same time, the higher thresholds may attract new domestic and foreign institutional capital looking to acquire or recapitalize existing licence holders, effectively using the reform as an entry point into the market.
For VASPs and fintech operators specifically, this is a watershed moment: many of these categories are being brought under a formal capital regime for the very first time, which signals SEC’s clear intent to treat digital asset businesses with the same seriousness as traditional capital market operators going forward.
What Affected Entities Should Do Now
Given the scale of these changes, entities within scope should promptly assess their current capital position against the applicable revised threshold for their specific licence category, and determine early whether they’ll need a capital injection, a restructuring of their business model, or a change to their licensing scope altogether. Given the complexity involved, particularly around newer categories like VASPs where compliance obligations are entirely untested, engaging legal and financial advisers early is far preferable to scrambling as the 2027 deadline approaches.
Frequently Asked Questions
Does this Circular apply to businesses that are still applying for an SEC licence, or only existing operators?
It applies to all three situations: entities already licensed, those currently in the licensing process, and those newly applying for registration.
Is the 10% AUM capital rule for large fund managers still in effect?
No. SEC corrected this shortly after publishing the Circular; the actual requirement is 0.1% of AUM for fund and portfolio managers with NAV or AUM exceeding ₦100 billion, not 10%.
What happens if my business can’t meet the new capital threshold by June 2027?
Failure to comply within the timeline can result in regulatory sanctions, including suspension or withdrawal of your SEC registration, though the Commission has indicated it may consider transitional arrangements on a case-by-case basis.
In Conclusion
SEC’s revised minimum capital framework represents the most significant shake-up of Nigeria’s capital market operator landscape in a decade, and the numbers involved mean this isn’t a compliance item any affected business can afford to defer. Whether you’re a broker, a fund manager, or a newly regulated VASP, the smartest move now is understanding exactly where your specific licence category falls and building a realistic plan toward the June 2027 deadline, well before it becomes an emergency.
If your business needs guidance on how these revised capital thresholds affect your SEC registration or licensing strategy, reach out to us via the contact details on our website www.bamandgadsolicitors.com.ng . We are here to help you navigate this transition with clarity.
Thank you for reading.