Senate Passes Investments and Securities Bill 2024
By Patience Ikpeme
The Nigerian Senate has approved the Investments and Securities Bill 2024 (ISB 2024), aimed at bolstering the operations of the Securities and Exchange Commission (SEC) and enhancing the functionality of the Nigerian capital market.
The bill was passed unanimously by lawmakers during a session on Wednesday, following the repeal of the 2007 Investments and Securities Act.
In announcing the passage, President of the Senate, Godswill Akpabio, emphasized the importance of minimizing risks in the capital market to attract more investors. He stated, “A lot of people would be happy to infuse funds into the capital market when they know a lot of the risk has been minimized.”
The Senate’s Chief Whip, Tahir Monguno, underscored the bill’s prospective impact on investor protection by stating that it would facilitate a safer market free from fraudulent dealings, thereby fostering greater participation from both local and foreign investors.
Senator Osita Izunaso, chairman of the Senate Committee on Capital Market, detailed the bill’s objectives, noting its potential to transform the capital market environment. He remarked, “The ISB 2024 is designed to establish a new market infrastructure and comprehensive regulation of investments and securities businesses,” particularly in critical areas such as derivatives and systematic risk management.
The legislation establishes the SEC as the apex regulatory authority for Nigeria’s capital market, tasked with ensuring capital formation, investor protection, and the maintenance of a fair, efficient, and transparent market. By aligning Nigerian regulations with global standards, the bill aims to fortify the integrity of the securities market against abusive practices, including insider trading and fraudulent schemes.
One of the bill’s standout provisions is the introduction of harsher penalties for operators of Ponzi schemes, mandating a minimum fine of N20 million, imprisonment up to ten years, or both. SEC Director General Dr. Emomotimi Agama applauded this development, highlighting that the bill explicitly prohibits such illicit schemes, thereby reinforcing protections for investors against unregulated fund managers.
Moreover, the ISB 2024 proposes an amendment allowing the Investor Protection Fund (IPF) to cover losses associated with the deregistration of brokerage firms, broadening its protective scope beyond the current coverage for bankruptcy or negligence cases.
Dr. Agama further expressed optimism about the bill’s potential to position Nigeria’s capital market as competitive on a global stage. “This bill’s passage would be pivotal in setting Nigeria on the path to a world-class capital market,” he stated, noting its critical role in enhancing the nation’s economic diversification strategies.
In addition to these major reforms, the bill introduces essential regulatory frameworks for Commodity Exchanges and Warehouse Receipts—key factors in developing Nigeria’s burgeoning commodities sector.
As Nigeria embarks on this new regulatory journey, the passage of the Investments and Securities Bill 2024 is poised to significantly transform the landscape of investments, with the potential to enhance the nation’s economic resilience and facilitate greater engagement from both domestic and international investors.
