SEC Gives Capital Market Operators Six Weeks to Submit Recapitalisation Plans

Nigeria’s Securities and Exchange Commission (SEC) has issued a six-week deadline for capital market operators to submit board-approved recapitalisation or licence downgrade plans, reinforcing its sweeping reform of the financial market.

The directive, contained in revised minimum capital guidelines released on March 18, 2026, signals a tightening of regulatory expectations and compels operators to reassess their financial positions and long-term viability.

According to the Commission, all operators must submit detailed implementation plans within six weeks, ahead of the June 30, 2027 compliance deadline.

“All CMOs are required to submit their recapitalization or downgrade plans within six weeks, with clear timelines and execution strategies.”

“Each plan must detail current capital position, minimum requirements, funding strategy, risk considerations, and governance structure.”

“Operators that fail to provide credible plans risk sanctions, including licence restrictions and regulatory delays under the ISA 2025 framework.”

“Pending applicants are not exempt, and applications older than 12 months will lapse and require fresh filings.”

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The directive applies across the board, covering brokers, dealers, fund managers, custodians, exchanges, and digital asset operators.

This move follows a major increase in minimum capital requirements across the industry. Broker-dealers are now required to hold N2 billion, up from N300 million, while dealers must meet a new threshold of N1 billion. Registrars now require N2.5 billion, while underwriters and clearing firms must maintain N5 billion. Composite exchanges are benchmarked at N10 billion.

The Commission stressed that the reform is not a one-off adjustment but a long-term effort to strengthen market resilience and align Nigeria’s capital market with global standards.

A critical component of the guidelines is the stricter definition of regulatory capital. Only high-quality, loss-absorbing capital will be recognised.

Eligible capital includes fully paid-up ordinary shares, qualifying irredeemable preference shares, share premium, and retained earnings from audited profits. Unrealised gains are excluded, while revaluation reserves, borrowed funds, shareholder loans, client funds, deferred tax assets, and encumbered capital are disallowed.

Although non-cash capital injections are permitted, they must meet strict valuation criteria, including quoted equities, CIS units, government bonds, and eligible OTC-traded securities.