by Edison Irabor, Senior Policy Reporter
In a move designed to transform the Nigerian capital market from a market of participants into a fortress of financial stability, Nigeria’s Securities and Exchange Commission (SEC) has officially “raised the bar” with its new minimum capital requirements for capital market operators (CMOs), including new entrants, virtual asset service providers (VASPs).
In its latest circular, titled “Revised Minimum Capital (MC) for Regulated Capital Market Entities,” the apex regulator has sent a clear signal to the ecosystem: if you want to play in the big leagues of Nigerian finance, you need a deeper chest of capital. Without a deeper chest, merge or leave.
The Breakdown: Who Needs to Bulk Up?
The SEC’s directive cuts across the entire spectrum of market participants. From the heavyweights to the niche players, the “price of admission” has gone up.
According to the SEC circular, the revised requirements target a broad range of functions. The revised minimum capital (MC) requirements for various categories of market operators are as follows:
Core Regulated Functions (Brokerage & Fund Management)
- Broker (client execution only): ₦600 million
- Dealer (proprietary trading only): ₦1.00 billion
- Broker-Dealer: ₦2.00 billion
- Sub-Broker (Digital): ₦100 million
- Sub-Broker (Corporate): ₦50 million
- Sub-Broker (Individual): ₦10 million
- Inter-Dealer Broker: ₦2.00 billion
- Tier 1 – Portfolio Managers (Full Scope): ₦5.00 billion (Firms with NAV/AuM over ₦100 billion must maintain a minimum of 10% of the NAV/AuM as capital)
- Tier 2 – Fund/Portfolio Managers (Limited Scope): ₦2.00 billion
- Tier 3 – Private Equity Fund Manager: ₦500 million
- Tier 3 – Venture Capital Fund Manager: ₦200 million
Non-Core Regulated Functions
- Tier 1 – Issuing House (Non-interest finance, advisory, and arrangement; no underwriting): ₦2.00 billion
- Tier 2 – Issuing House (One-stop shop with underwriting services): ₦7.00 billion
- Rating Agency: ₦500 million
- Registrar: ₦2.5 billion
- Trustees: ₦2.00 billion
- Underwriters: ₦5.00 billion
- Investment Adviser (Corporate): ₦50 million
- Investment Adviser (Individual): ₦10 million
Market Infrastructure
- Central Counter Party (CCP): ₦10.00 billion
- Clearing and Settlement Company (CSC): ₦5.00 billion
- Composite Securities Exchange: ₦10.00 billion
- Non-Composite Securities Exchange: ₦5.00 billion
Consultants
- Capital Market Consultant (Corporate): ₦25 million
- Capital Market Consultant (Partnership): ₦10 million
- Capital Market Consultant (Individual): ₦2 million
Fintech Operators
- Robo Adviser: ₦100 million
- Crowdfunding Intermediary: ₦200 million
Virtual Asset Service Providers (VASPs)
- Ancillary Virtual Assets Service Providers (AVASPs): ₦300 million
- Digital Assets Offering Platform (DAOP): ₦1.00 billion (from ₦500 million)
- Digital Assets Intermediary (DAI): ₦500 million
- Digital Assets Platform Operator (DAPO): ₦500 million
- Real-world Assets Tokenization and Offering Platform (RATOP): ₦1.00 billion
- Digital Assets Exchange (DAX): ₦2.00 billion (from ₦500 million in 2022 and then from ₦1.00 billion in 2024)
- Digital Assets Custodian: ₦2.00 billion (from ₦500 million in 2022 and then from ₦1.00 billion in 2024)
Commodity Market Intermediaries
- Collateral Management Company (Tier 1 – Local/Regional): ₦200 million
- Collateral Management Company (Tier 2 – National/International): ₦500 million
- Commodities Broker/Dealer: ₦50 million
- Commodities Broker: ₦30 million
- Commodities Dealer: ₦20 million
- Warehousing Operators: ₦500 million
Other Entities
- Custodian of Securities (Bank): As prescribed by the CBN
- Non-Bank Custodian: ₦50.00 billion plus 0.1% of Assets Under Custody (AUC)
- Dealing Member Banks: As prescribed by the CBN
- Nominee Company: ₦5 million
Source: Securities and Exchange Commission (SEC) Nigeria, “Revised Minimum Capital (MC) for Regulated Capital Market Entities,” January 16, 2026.
While the specific figures vary by category—ranging from Broker-Dealers to Registrars—the underlying theme remains consistent: Consolidation of Capacity.
“The Commission, in its commitment to the development of a vibrant and resilient capital market, has revised the minimum capital requirements for various categories of capital market operators.”- SEC Nigeria
This isn’t merely a bureaucratic adjustment; it is an economic upgrade—at least as intended by the regulator. For years, there has been the argument, especially by the gatekeepers, that many CMOs were operating on “shoestring budgets” that left them vulnerable to market shocks and unable to fund large-scale transactions. While this may be arguable, by revising the minimum capital requirements, the SEC is performing a stress test on the entire market.
The goal? To ensure that when the next economic headwind hits, the firms holding investor funds don’t just lean—they stand firm. After all, Nigeria wants to have a $1 Trillion economy by 2030. This, partly, means more capital muscle in its financial markets. Similarly, Nigeria has increased minimum share capital for operators in banking and insurance, as well as bureau de change (BDC) businesses, where BDC operators reduced from over 4000 to just about 80.
But how about VASPs, the newest entrants in the capital market, whose industry is still at its nascent stage?
The VASP Paradox: A Constructive Consideration as Industry Players React
While the SEC’s drive for stability is laudable, its approach to the newest kids on the block—Virtual Asset Service Providers (VASPs)—has instantly sparked strong reactions among industry watchers
Under the new regime, Digital Asset Exchanges (DAXs) and Digital Asset Custodians are now required to maintain a minimum paid-up capital of N2 billion, while Digital Asset Offering Platforms face a N1 billion hurdle. Even Real-world Assets Tokenization and Offering Platforms (RATOP), a model that is yet to be fully entrenched today, are expected to cough out N1 billion as minimum capital. Are there really investors willing and ready to invest such an amount of capital at this stage of commercial uncertainty?
Read also: Crypto: Nigeria is ready for business, says SEC Director-General
Chimezie Chuta, Founder of Blockchain Nigeria User Group (BNUG) and Vice Chair of Blockchain Industry Coordinating Committee of Nigeria (BICCoN), who has welcomed the SEC’s move to mean that digital assets “are becoming a regulated asset class that must coexist with Nigeria’s capital markets”, also believes that the SEC needs to do some serious rethinking of its policy. In his Linkedin post, Chuta pointed out that “Regulatory strength must not come at the expense of access and local capacity. If we raise the gates, tighten the rules, and then forget to build on-ramps, we risk turning Nigeria into a compliance island where foreign firms dominate, local founders are sidelined, and talents migrate into shadow markets. That would be a tragedy.”
Similarly, Stanley Golomo, an industry player and leader, reacted to the SEC circular as follows: “As a Compliance Specialist and Chairman of the SiBAN Restoration Committee, I see the intent: protecting investors and ensuring stability. However, we must ask at what cost to Local Innovation?
“Why this is a “Red Flag” for the ecosystem: Entry Barriers: A ₦2 Billion requirement effectively prices out local startups, leaving the market open primarily to foreign giants with deep pockets.
“Stifled Creativity: Innovation often starts in small, agile labs. When the “cost of entry” is this high, we risk losing our brightest minds to more favorable jurisdictions.
“Monopoly Risk: High capital requirements often lead to market consolidation, which can reduce competition and lead to higher costs for the average Nigerian user.
“We want a regulated market, but we need an inclusive one. Regulation should be a bridge to growth, not a wall that shuts out the very entrepreneurs who put Nigeria on the global blockchain map.
”At SiBAN, we are committed to engaging with the Commission to ensure that the voice of the local builder is heard. We need a risk-based approach that protects the public without killing the industry.”
Japhet Johnson, CTO & Co-Founder of Describe Innovations who is also a member of SiBAN, believes that the SEC’s recapitalization requirements for VASPs makes one thing painfully clear: “this framework does not protect or encourage indigenous innovation.
“The revised minimum capital thresholds are prohibitively high, especially for local startups that have been building in this space long before regulation caught up. Policies like this don’t strengthen the ecosystem, they silently erase local players, shut out innovators, and concentrate power in the hands of a few well-funded entities.
“Regulation should guide growth, manage risk, and create fairness. It should not become a tool for: selective access, regulatory exclusion, market monopolization, or discouraging homegrown solutions. You cannot claim to support innovation while pricing innovators out of the market.”
Closing
The SEC is essentially telling the market that the era of “thin-cap” operations is over. By mandating a more robust capital base, the regulator is shifting the focus from quantity (number of operators) to quality (strength of operators).
However, particularly for the VASP sector, the regulator must tread carefully. To build a truly competitive digital economy, the floor must be strong enough to support the weight of the market, but not so high that the innovators of tomorrow can’t even reach the door handle.
CAB will continue to follow industry reactions closely, while also expecting any responses from the SEC leadership in the coming days.
Read also: Crypto Regulation: Ghana crosses finish line with Landmark Virtual Asset Law
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