Uche Uwaleke, Professor and Director of the Institute of Capital Market Studies at Nasarawa State University, Keffi, has said that the Investments and Securities Act (ISA) 2025 represents a significant milestone in modernising Nigeria’s capital market framework, enhancing regulatory oversight, and providing stronger investor protection.
Speaking at the ISA 2025 sensitisation workshop organised by the Institute of Capital Market Studies (ICMS) in collaboration with the Capital Market Academics of Nigeria (CMAN) on April 26, 2025, he emphasised that the new Act aligns the country’s capital market structure more closely with international best practices.
According to Uwaleke, one of the major improvements introduced by ISA 2025 is the enhancement of the regulatory powers of the Securities and Exchange Commission (SEC). He explained that the Act significantly strengthens the SEC’s authority, bringing it into alignment with global standards as set by the International Organisation of Securities Commissions (IOSCO).
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“The new provisions expand the Commission’s surveillance capabilities, allowing it access to critical data, enhancing its ability to track illegal activity, and enforcing compliance more effectively,” he stated, referring to Section 3 of the Act.
Uwaleke also highlighted the inclusion and regulation of digital assets within the Act as a groundbreaking development. He pointed out that ISA 2025 broadens the scope and definition of securities to encompass virtual and digital assets such as cryptocurrencies and investment contracts. This classification now brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under the regulatory oversight of the SEC.
“This move ensures transparency and enhances investor protection in the increasingly important digital asset space,” Uwaleke noted.
Furthermore, the Act introduces stringent measures against fraudulent investment schemes. Uwaleke stated that the ISA 2025 empowers the SEC to prosecute operators of Ponzi schemes, with severe penalties including imprisonment for a term not less than ten years and fines of no less than N20 million. He stressed that the SEC is also authorised to recover profits made through fraudulent activities, thereby ensuring restitution for affected investors, as captured under Section 192.
The expanded mandate of the Investor Protection Fund (IPF) was another key area Uwaleke addressed. He explained that under the new Act, the IPF, established by securities exchanges, now covers investor losses linked not only to cases of bankruptcy or negligence but also to the deregistration of brokerage firms. According to him, this expansion marks a vital step in safeguarding the interests of investors.
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In discussing further reforms, Uwaleke pointed to the introduction of a legal framework for the regulation of commodities exchanges, collateral management companies, and warehouse receipt issuers, detailed under Section 218. He stated that commodities contracts and derivatives are now classified as securities and brought under the regulatory scope of the SEC. Uwaleke added, “This development is expected to stimulate activities in the commodities sector, provide structured financing options, and reduce market risks.”
On the strengthening of dispute resolution mechanisms, Uwaleke said that the Investment and Securities Tribunal (IST) had been given exclusive jurisdiction to adjudicate disputes arising from investments and securities transactions in Nigeria, as detailed under Section 318(1). He emphasised that proceedings at the Tribunal are expected to be swift, with matters disposed of within three months from the commencement of the hearing of the substantive action, in accordance with Section 323(5). “This will help avoid undue delays that have historically discouraged investor confidence,” he remarked.
Despite these major advancements, Uwaleke cautioned that the ISA 2025 is not without its shortcomings. He pointed out that while the Act makes significant strides in market regulation and investor protection, several gaps and unresolved issues remain. He expressed concern that potential loopholes could be exploited by market participants, especially in areas where the law is broad or ambiguous. “One major pitfall,” Uwaleke warned, “is the limited scope for cross-border regulation.”
He explained that ISA 2025 does not adequately address the challenges associated with cross-border securities trading or regulatory cooperation with foreign jurisdictions. According to him, foreign platforms offering securities or crypto products to Nigerian users might escape the SEC’s jurisdiction if they lack a local presence. He cited examples of offshore investment apps such as Trove, Bamboo, Risevest, Chaka, Passfolio, and Hedge, which offer access to U.S. and Chinese stock markets, and crypto platforms like Binance and Kraken. “These platforms partner with U.S.-based custodians, yet they serve Nigerian users without fully complying with ISA 2025 requirements,” Uwaleke lamented.
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He warned that as Nigerian investors increasingly access foreign investment platforms, regulatory gaps may leave them exposed to unprotected risks. Uwaleke pointed out that investors using such platforms might have no legal protection in the event of fraud or platform collapse. “If the platform’s custodians or brokers fail, investors may lose access to their assets, and offshore apps may not prioritise cybersecurity or customer support for Nigerian users,” he explained. He further noted that Nigerian investors using these platforms do not qualify for protections under frameworks such as the U.S. Securities Investor Protection Corporation (SIPC) or the U.K.’s Financial Services Compensation Scheme (FSCS).
Uwaleke reiterated that while ISA 2025 represents a critical step forward in modernizing Nigeria’s capital market, enhancing regulatory oversight, and providing robust investor protection, it is not without critical regulatory blind spots. He emphasised that addressing these gaps will require the development of secondary legislation through SEC rules, coordinated inter-agency frameworks, adequate resourcing of the SEC, and active stakeholder engagement involving investors, tech firms, market operators, and capital market academics. “It is only by strengthening these areas that we can ensure the Nigerian capital market evolves into a safer, more transparent, and globally competitive environment,” he asserted.
