The Senate of the Federal Republic of Nigeria has passed the Investment and Securities Bill (ISB) 2024, a major boost to the operations of the Securities and Exchange Commission (SEC) and the Nigerian capital market.

The Investment and Securities Bill, intended to repeal the Securities and Exchange Commission Act, passed second reading in the Senate on Wednesday.

While considering the report on the bill by the Capital Market Committee, Senate Chief Whip Tahir Monguno said the bill would protect investors and eliminate fraudulent transactions in the capital market .

Leading the debate, Senator Osita Izunaso, Chairman of the Senate Committee on Capital Market, said the bill seeks to repeal the Investment and Securities Act of 2007 and enact the Investment Act into law. and Securities of 2024, declaring that the ISB is capable of transforming the capital market. encouraging the influx of foreign investors and strengthening investor confidence, among others.

Izunaso said: “The bill seeks to repeal the existing Investment and Securities Act of 2007 and establish a new market infrastructure and broad system of regulation of investments and securities activities in Nigeria, in particularly in the areas of derivatives, systematic risk management and financial activities. market infrastructure and Ponzi scheme and platforms.

He said: “This was to establish the Securities and Exchange Commission as the apex regulator of the Nigerian capital market. This will involve market regulation to ensure capital formation, investor protection, maintenance of a fair, efficient and transparent market and reduction of systemic risk.

Izunaso further stated that the main objective of the bill was to enact legislation aligned with global dynamics with regard to the regulation of the capital market through the provision of an innovative regulatory framework.

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“This will protect the integrity of the securities market against all forms of market abuse and insider trading. It will prevent unauthorized, illegal, fraudulent and unfair trading practices related to securities and investments.

He said the overarching objective of the proposed legislation was to strengthen the capacity of the Commission for the effective execution of its statutory mandate as well as reposition this vital sector of the economy for national economic transformation.

The bill was also supported by Senators Isa Jibrin (APC-Kogi) and Adetokunbo Abiru (APC-Lagos).

According to Jibrin, “We have encountered challenges in terms of the specific duties that the Securities and Exchange Commission (SEC) is supposed to undertake to ensure the efficient functioning of the Nigerian capital market. This amendment is very important to ensure that the SEC does its work in accordance with global best practices.

Announcing the passage of the bill, Senate President Godswill Akpabio said many people would be happy to inject funds into the capital market when they know that much of the risks have been minimized .
He then referred the bill to the Senate Capital Markets Committee for additional legislative action.

Recently, SEC Director General Emomotimi Agama said the bill calls for tougher sanctions against Ponzi scheme operators through the proposed Investment and Securities Bill (ISB). 2024, which provides for a minimum fine of N20 million or up to 10 years in prison, or both.

Agama explained that the bill explicitly prohibits Ponzi and pyramid schemes, thereby strengthening the protection of investors against illegal fund managers, adding that it aims to protect Nigerian investors from fraudulent schemes and improve the global competitiveness of the capital market.

A notable amendment to the bill would allow the Investor Protection Fund (IPF), created by stock exchanges, to cover investors’ losses linked to the delisting of brokerage firms, beyond the current coverage of cases of bankruptcy or negligence.

Agama also stressed the need to update the existing ISB 2007 to reduce ambiguities and bring Nigeria’s capital market regulation in line with international standards.
“The passage of this bill would be crucial in putting Nigeria on the path to a world-class capital market,” he said, highlighting the role of a robust capital market in economic diversification .

ISB 2024 also introduces regulatory frameworks for commodity exchanges and warehouse receipts, essential steps to develop Nigeria’s commodities sector.