REGULATION | Nigerian President Signs Investment and Securities Act 2024 into Law Formally Classifying Virtual Assets as Securities

For the first time, virtual assets and investment contracts are formally classified as securities, placing Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under SEC’s regulatory purview.

CryptoGuru··4 min read

Nigerian President, Bola Ahmed Tinubu, has officially signed the Investment and Securities Act (ISA) 2024 into law, marking a pivotal moment in Nigeria’s capital market reform.

The newly enacted legislation repeals the former Investments and Securities Act No. 29 of 2007 and is designed to fortify the legal and regulatory framework governing investments and capital market activities in the country.

The Securities and Exchange Commission  of Nigeria (SEC Nigeria), in a statement, described the presidential assent as a ‘transformative step’ aimed at bolstering investor protection, enhancing market transparency, and driving sustainable growth.

A Modern Framework for a Dynamic Market

One of the standout achievements of the ISA 2024 is the expansion of SEC’s regulatory authority to align with global standards set by institutions like the International Organization of Securities Commissions (IOSCO).

According to SEC Nigeria, these enhanced regulatory powers will enable it to maintain its “Signatory A” status under IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), a crucial benchmark for credibility in global financial markets.

The Act introduces several structural reforms and innovations affecting exchanges, digital asset operators, commodities trading, and systemic risk management, ensuring that Nigeria’s capital market remains competitive and resilient.

Key Highlights of the ISA 2024

  • Classification of Exchanges: The Act categorizes exchanges into Composite and Non-composite types. Composite exchanges can list and trade all securities and products, while Non-composite exchanges are restricted to specific asset classes.
  • Regulation of Financial Market Infrastructure: The law establishes a framework for regulating clearinghouses, trade depositories, and central counterparties, essential components of a well-functioning capital market.
  • Recognition of Digital Assets: For the first time, virtual assets and investment contracts are formally classified as securities, placing Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under SEC’s regulatory purview.
  • Support for Commodity-Based Economic Activities: The Act introduces legal provisions for commodity exchanges and warehouse receipts, which are expected to boost sectors such as agriculture and mining by facilitating structured financing and reducing market risks.
  • Enhanced Fundraising Options for Sub-National Governments: State governments and agencies now have greater flexibility in raising funds through the capital market, providing new financing opportunities for infrastructure development beyond federal allocations and commercial borrowing.
  • Stronger Enforcement Against Financial Scams: The Act imposes stricter penalties, including significant jail terms, on individuals and entities found guilty of operating unlawful investment schemes, reinforcing the government’s commitment to cleaning up the investment space.
  • Market Stability Protections: Transactions involving market infrastructure – such as those processed through clearinghouses or central counterparties—are now shielded from general insolvency laws. The SEC is also empowered to monitor and mitigate systemic risks to prevent financial shocks.
  • Expanded Issuer Participation: The range of entities permitted to issue securities to the public has been broadened, encouraging more diverse financial products and innovative capital-raising mechanisms.
  • Increased Transparency: The Act mandates the use of Legal Entity Identifiers (LEIs) for all market participants in securities transactions, enhancing traceability, accountability, and risk management.
  • Strengthening of the Investments and Securities Tribunal: Amendments to the tribunal’s structure, jurisdiction, and appointment process are expected to improve dispute resolution efficiency and reinforce investor rights.

 

SEC and Stakeholders Applaud the Development

SEC Director-General, Dr. Emomotimi Agama, hailed the presidential assent as a major boost for investor confidence and market development.

“The ISA 2024 underscores our dedication to fostering a dynamic, inclusive, and resilient capital market,” Dr. Agama stated.

“By addressing regulatory gaps and incorporating forward-looking provisions, the Act empowers the SEC to drive innovation, enhance investor protection, and reposition Nigeria as a prime destination for both local and foreign investment.”

 

Dr. Agama also commended the National Assembly for its bipartisan support and acknowledged the pivotal roles played by the Honourable Minister of Finance and the Minister of State for Finance in aligning the Act with the broader economic vision of the Tinubu administration.

 

 

Implications for Nigeria’s Capital Market

The ISA 2024 is poised to reignite investor interest in Nigeria’s capital market by providing a clearer regulatory landscape for emerging asset classes, including digital assets and commodities, while strengthening investor protection mechanisms.


By fostering a more balanced playing field for issuers, exchanges, and operators and equipping regulators with the tools to combat fraud and misconduct, the Act lays the foundation for deeper capital formation and economic diversification.

With the enactment of the ISA 2024, Nigeria takes a significant leap toward establishing a world-class capital market – one that is inclusive, innovative, and resilient.

 

 

 

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