SEC to clamp down on unfit market operators

• pledges stronger investor protection

The Securities and Exchange Commission (SEC) has pledged to ensure that only individuals who meet rigorous ethical and professional standards are allowed to operate in Nigeria’s capital market.

This decision the Commission said is aimed at safeguarding investors and strengthening market confidence.

A statement from the SEC said the Director-General, Dr. Emomotimi Agama, made this known in Abuja over the weekend, where he issued a stern warning to market operators engaging in dubious or unethical practices, noting that such individuals will face serious consequences.

According to Agama, the Commission will intensify efforts to enforce the “fit and proper person’s test,” a benchmark that assesses whether an individual or firm meets the statutory and regulatory standards required to function in the market.

“As a form of self-regulation, operators must understand that if you engage in unethical conduct, the SEC will act decisively. The essence of registering a securities market operator lies in the fit and proper person’s test. This test ensures compliance with the provisions of the Investments and Securities Act (ISA) 2007 and other relevant SEC regulations,” he said.

He added that public companies must provide accurate and timely disclosures, which are essential in enabling investors to make informed decisions. Any breach of disclosure requirements, he warned, contravenes both SEC regulations and the ISA and will attract regulatory action. “There is no hiding place anymore for anyone with an intention to defraud investors in the Nigerian capital market,” he stated.

Agama explained that investor protection remains a cornerstone of the Commission’s mandate, as outlined in the ISA 2007, and that ensuring the safety of investments is integral to the market’s growth. He noted that the Commission, under the leadership entrusted to him by President Bola Ahmed Tinubu, is determined to enforce this responsibility diligently.

“It is important to state that every investor in Nigeria is under the cover of the SEC, provided they operate within the Nigerian capital market. The year 2025 is one where we will not tolerate any activities that fall outside the provisions of the ISA 2007,” Agama said.

He said he was eagerly anticipating for the Presidential assent to the newly passed Investment and Securities Bill, which is currently undergoing administrative procedures. According to him, the new legislation will further strengthen the SEC’s regulatory powers and intensify the clampdown on Ponzi schemes, with stiffer penalties designed to serve as a deterrent.

“Once the new Act is signed into law, it will underscore our determination to provide a robust regulatory framework that shields investors from fraudulent schemes, especially Ponzi schemes, which have caused significant financial losses in the past,” he noted.

Agama also spoke on the importance of regulatory compliance and timely disclosure, describing them as non-negotiable duties for all market participants. He urged operators—both existing and prospective—to collaborate with the SEC to foster sustainable growth in the capital market.

Commenting on recent regulatory actions, he said the revocation of licenses, suspension of operators, and pursuit of unregistered firms are early indicators of the Commission’s broader strategy in 2025.

“What you have seen in recent months is only a tip of the iceberg. We believe that a well-protected investor is an empowered investor, and we will use every tool at our disposal, within the bounds of Nigerian law, to prevent and penalize fraudulent activities in the capital market,” he added.