In a fresh move to choke funding for terrorism, the Securities and Exchange Commission (SEC) has mandated all Capital Market Regulated Entities, CMREs, to sign up for the Nigeria Sanctions Alerts platform.
SEC said the urgent directive became necessary after new names were added to terror watchlists, including BDC operators accused of channeling funds to ISWAP and other extremist groups.
Specifically, the Commission said all CMREs must subscribe to NigSac Alerts and immediately freeze assets linked to individuals and entities designated for terrorism financing, including those recently named for alleged support to ISWAP.
The directive, through circulars by the apex capital market regulator requires a mandatory compliance measure with threats of fines, operational suspension, or outright registration revocation for non-compliance.
The directive, it ess learnt, is pursuant to the implementation of Financial Action Task Force (FATF) statements on high-risk jurisdictions, signals an escalation in Nigeria’s anti-money laundering and counter-terrorism financing regime.
Recently, the US government named Nigerian citizens and six Nigerian firms involved in facilitating financial flows linked to the Islamic State of West African Province (ISWAP).
SEC’s action is said to be in line with directives from Central Bank of Nigeria (CBN), tecently, that havevtightened noose on banks and otyer financial institutions.
READ ALSO:How State Governments In Nigeria Can Accelerate Infrastructure Development
Consequently SEC, now requires CMREs to terminate all correspondent banking relationships with listed high-risk jurisdictions, business entities and individuals.
“In line with the provisions of the Terrorism Prevention and Prohibition Act (TPPA), 2022, the Nigeria Sanctions Committee (NSC) has designated six (6) Individuals and three (3) Entities as terrorist financiers and subsequently added them to the Nigeria Sanctions List,” SEC stated in circular to all market operators.
The circular mandated all capital market regulated entities and individuals to do the following:
“Immediately, identify and freeze, without prior notice, all funds, assets, and any other economic resources belonging to the designated persons and entities in their possession and report same to the Secretariat of the Nigeria Sanctions Committee;
“Report to the Secretariat of the Nigeria Sanctions Committee any assets frozen or actions taken in compliance with the designation, including attempted transactions;
“Immediately file a suspicious transactions report to the Nigerian Financial Intelligence Unit (NFIU) for further analysis on the financial activities;
“Report as a suspicious transactions report to the NFIU, all cases of name matching in financial transactions prior to or after receipt of this Sanctions List;
“Subsequently prohibit dealings with the designated persons and entities; and continue to check for transactions relating to the designated persons and entities and report findings to the Nigeria Sanctions Committee through info@nigsac.gov.ng”, SEC stated.
“Take Note that at all times, any unusual or suspicious transactions shall be promptly reported to the NFIU,” SEC warned.
According to the capital market apex regulator, the circular takes immediate effect and failure to comply with the directives constitutes a violation of the Investments and Securities Act, 2025, and the SEC AML/CFT Rules and Regulations and such failure would attract appropriate regulatory sanctions, including fines, suspension of operations, or revocation of registration.
Market analysts say the immediate consequences of the directive, among others, is that capital market operators should immediately audit their AML/CFT technology stacks to ensure NigSac Alerts subscription and automated flagging capability.
CMREs are therefore required to file suspicious transactions reports with the Nigerian Financial Intelligence Unit (NFIU) for any name matching with designated individuals and entities, whether such matches occur pre- or post-transaction.
The obligation extends to reporting all funds frozen and actions taken in compliance with designations to the NSC Secretariat via info@nigsac.gov.ng.
The designations also create secondary compliance obligations: CMREs must now maintain watchlists that incorporate designations from both the NSC and US Treasury, as regulatory expectations implicitly track international sanctions coordination.
For institutional investors and fund managers, this translates to enhanced due diligence on counterparty relationships, particularly where transactions flow through informal financial infrastructure or jurisdictions flagged under FATF increased monitoring status.
