Some analysts have expressed concerns over, what they regard as far-reaching revision of capital requirements by the Securities and Exchange Commission (SEC), for virtually all capital market operators, including, brokers, fund managers, digital firms.
The analysts, including Victor Ogiemwonyi, retired investment banker, Johnson Ogbualo, banker, Friday Ameh, Lagos based oil analyst, among others say the action is capable of driving away smaller players, resulting in possible forced mergers and acquisitions as well as reduced innovation on the account of higher transaction fees.
SEC, in a circular released on January 16, 2026, replaced the long-standing 2015 capital regime and sets a compliance deadline of June 30, 2027, a development that is likely to force consolidation, exits of smaller and more tightly capitalised industry.
The move is intended to harden the financial resilience of the market, possibly, radically reshaping who survives in it.
Specifically, the revised capital rules affect brokers, dealers, fund managers, issuing houses, fintech firms, and digital asset operators.
For brokers, the minimum capital requirement triples from N200 million to N600 million, while dealers now require N1 billion, up from N100 million.
Broker-dealers face the steepest increase from N300 million to N2 billion.
Fund and portfolio managers are now subject to a tiered structure.
Managers overseeing assets above N20 billion will need N5 billion in capital, while mid-tier managers must hold N2 billion.
Private equity and venture capital firms face requirements of N500 million and N200 million, respectively.
Also, any firm managing assets above N100 billion must hold at least 10% of assets under management as capital,while digital asset firms, previously operating in regulatory limbo, are now fully captured.
Exchanges and custodians must hold N2 billion each, while tokenisation platforms and intermediaries face thresholds between N500 million and N1 billion.
Even robo-advisers, considered low-risk, must now maintain N100 million in capital, among others.
Ameh, was of the opinion that the rules are overreaching as they are likely to accelerate a wave of consolidation, as smaller players struggle to meet the steep thresholds.
With full implementation deadline set for June 30, 2027, the industry now faces an 18-month window to comply, with possible leaner capital market then
However, in his comprehensive response sent to metrobusinessnews.com,(MBN), on ‘Capital Market Recapitalisation…Regulators Enable…, Ogiemwonyi said, “I keep saying our Regulators don’t know that their primarily role is to enable the industry they regulate.
While there is need to up the capital requirements of Capital Market Operators , because of the many dislocations in the present economy… FX and inflation burdens… no need to over do it …it should be done with a purpose .
This current roll out of recapitalisation is excessive because the thinking is, keep only big players and all will be well.
After all, Banks have raised capital and insurance has followed … it is our turn.
Capital has to serve a purpose …. What does a StockBroker / Dealer need N2b for ? … the role is essentially that of an agent to customers…
Today, many of the risks that allowed fringe players to constitute a problem for the market, have been mitigated by the reforms that has taken place in the Capital market space.
We now have world class regulation of our market.
Dealers who trade volumes for themselves….when it does proprietary Trading … take its own risk …
If it losses money…
It is their own money… the market has no role … the too big to fail, does not apply here …if there is market failure to settle… the Exchange moves in, and do a forced sale of securities in their CSCS portfolio… any loss goes to them.
They can fail quietly.
Risk is much more mitigated today …
…any buy or sale into or from a customer’s portfolio is immediately notified to the customer by the CSCS vis Trade Alerts … and customers have two days to challenge that trade if not authorised.
…Proceeds of a sale, go straight to the customer’s Bank Account and securities go to the customer’s CSCS Account. …So all the common risks, have all been taken away, with these reforms.
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Settlement has recently moved to T+2 … reducing the risk of trade failures …
…even that rarely happens… even if it happens, having a N2b capital base does not guarantee anything… because once the Broker/ Dealer is registered as having shown he has N2b, …he can tomorrow go and buy a property with the money in Banana Island .
An Issuing House ..does not need N2b Capital … because its business is mainly advisory… if an issuing House wants to be an underwriter … they should register separately as an underwriter and then N2b or more will be needed… even this is not cast in stone … an underwriter with good relationships, can always arrange other institutions to join in any large underwriting… like Banks use to syndicate loans in our days in Banking…
The critical infrastructure needed which are cheaper today because software to manage operations is the critical thing… this should be assessed and costed plus sufficient working capital to meet unexpected market events …
The last time this recapitalisation was done, there was debate as to what appropriate capital was needed. Many pointed to the US and their Capital requirements…there.
Many of those in that Quarterly Capital Market Committee meeting were ambivalent…
I spoke out that given the dislocations at the time after the market crash and the recapitalisation in the Banks and other Financial Market institutions, we needed to do something …at the time the market was small and no one was making a profit.
The Regulators called a small group meeting in Abuja and I was in that group … I told them at that meeting…we must be careful to ensure we still have a market… you can not have a market, without players … Nigeria was a vast country… we must ensure we have sufficient players in the
Market … that was how another category of Sub- Brokers came about… they were to clear their trades through bigger Broker / Dealers …They remained in the Market …essentially as marketing agents who attracted customers and
Maintained their relationship …this has worked well since .
I think the capital requirements should have taken these into consideration.
The New capital requirements will increase risks and earning a return on capital will be difficult for many.”
