Nigeria’s capital market now faces a major shake-up following mandatory minimum capital requirements set for market entities.
Not only will the move see market operators outpace their peers in other African countries but it will also trigger survival of the fittest.
On January 16, 2026, the Securities and Exchange Commission (SEC) announced new minimum capital requirements for all regulated entities in the market, setting a compliance deadline of June 30, 2027.
The regulator warned that failure to meet the new thresholds may result in suspension or withdrawal of registration.
According to the SEC, the revised capital framework is designed to strengthen market stability and align operators’ capital bases with evolving risk profiles.
Sharp increase across categories
Pinnacle Daily earlier reported that under the new rules, broker-dealers must raise their capital base from ₦300 million to ₦2 billion.
Brokers are required to increase capital from ₦200 million to ₦600 million, while proprietary trading dealers must hold ₦1 billion, up from ₦100 million.
Fund managers now operate under a tiered system as Tier 1 (full scope) firms must maintain ₦5 billion, while Tier 2 (limited scope) operators must hold ₦2 billion.
Managers with assets exceeding ₦100 billion are required to maintain at least 10 per cent of assets as capital.
The increases extend beyond brokerage firms as Tier 2 issuing houses with underwriting now require ₦7 billion, while underwriters’ capital jumps from ₦200 million to ₦5 billion.
Registrars and trustees must hold ₦2.5 billion and ₦2 billion respectively.
Market infrastructure providers face the highest thresholds as Central counterparties and composite exchanges must maintain ₦10 billion, while clearing houses and non-composite exchanges require ₦5 billion.
The commission also introduced capital requirements for fintech and digital asset operators, reflecting the growing role of technology-driven platforms in the market.
Operators raise concerns
The recapitalisation framework, analysts say, amounts to a survival test for many operators, particularly smaller and mid-sized firms.
One major concern unsettling operators is the lack of clarity around what qualifies as regulatory capital, with operators arguing that retained earnings should be recognised.
Others point to the financial burden of compliance, including registration fees, and are urging the SEC to ease associated costs.
There are also concerns that the framework does not sufficiently distinguish between conventional and non-interest operations, despite differences in business models and risk structures.
The sharp increase in capital requirements for issuing houses, from ₦200 million to ₦7 billion, has also drawn criticism.
Some industry players argue that many issuing houses are subsidiaries of well-capitalised banks, making a high standalone capital threshold potentially redundant.
Expert seeks deadline extension
Uche Uwaleke, professor of capital markets at Nasarawa State University, described the move as broadly necessary given economic realities.
Speaking on Channels’ Business Morning programme on January 26, he noted that the previous framework, in place since 2015, had become outdated due to currency depreciation, inflation and rapid financial sector developments, particularly in fintech.
He also referenced the repealed Investment and Securities Act of 2025 as providing legal backing for the SEC’s efforts to strengthen market resilience and investor protection.
“So, I think in all of this, the whole idea is to strengthen the market, to make it a lot more resilient,” Uwaleke said and to also align it with what is happening in the other sectors including banking and insurance.
However, he argued that the June 2027 deadline may be too tight.
“So, it will be difficult for many of them to raise funds in 2027; that’s why I suggested that it should be extended, particularly so when the deadline is just a month after May,” Uwaleke said.
He stressed that banks and insurance companies are currently undergoing their own recapitalisation exercises, with deadlines set for March and June respectively.
He believes that this places additional strain on capital market operators that are assisting in those processes.
“Now, these capital market players are also the ones helping them to, you know, package these funds, we are talking about issuing houses here.
“Before you can raise funds, of course, from the market, you have to go to an issue house that will coordinate the other parties for you, talking about registrars and the voters.
“All of them are currently involved in the recapitalisation being done by banks and insurance companies. So, that’s in itself, is something that is occupying them for now,” Uwaleke said.
He added that many capital market firms are privately owned and lack the same fundraising flexibility as listed banks and insurers, making a longer compliance window more realistic.
Nigeria ahead of regional peers
Beyond domestic implications, the new framework will place Nigeria among the most capital-intensive markets in Africa.
Under the revised rules, brokers must hold ₦600 million — roughly $400,000 — while broker-dealers are required to maintain ₦2 billion, equivalent to about $1.33 million.
A cross-country comparison shows that these figures exceed comparable thresholds in South Africa, Kenya and Ghana.
| Country | Operator Category | Minimum Capital (Local Currency) | Equivalent in NGN (Approx.) | Equivalent in USD (Approx.) |
| Nigeria | Broker | NGN 600,000,000 | 600000000 | 400000 |
| Nigeria | Broker-Dealer | NGN 2,000,000,000 | 2000000000 | 1333333.33 |
| Nigeria | Fund Manager (Tier 1) | NGN 5,000,000,000 | 5000000000 | 3333333.33 |
| Nigeria | Fund Manager (Tier 2) | NGN 2,000,000,000 | 2000000000 | 1333333.33 |
| Nigeria | Issuing House | NGN 10,000,000,000 | 10000000000 | 6666666.67 |
| South Africa | Broker (Liquidity Floor) | ZAR 5,000,000 | 425000000 | 283333.33 |
| Kenya | Stockbroker | KES 50,000,000 | 450000000 | 300000 |
| Kenya | Broker-Dealer | KES 70,000,000 | 630000000 | 420000 |
| Ghana | Broker (Indicative Lower Tier) | GHS 200,000 | 26000000 | 17333.33 |
In South Africa, intermediaries regulated by the Financial Sector Conduct Authority typically maintain minimum operational liquidity of around ZAR 5 million, equivalent to about ₦425 million or roughly $283,000.
It is worthy of note that the South African system places stronger emphasis on liquidity and ongoing solvency rather than large fixed paid-up capital floors.
Kenya’s Capital Markets Authority requires stockbrokers to hold KES 50 million and broker-dealers to hold KES 70 million.
Converted at prevailing assumptions, that amounts to approximately ₦450 million ($300,000) for stockbrokers and ₦630 million ($420,000) for broker-dealers — well below Nigeria’s ₦2 billion requirement.
In Ghana, entry-level broker thresholds can start around GHS 200,000, equivalent to roughly ₦26 million, or under $20,000, depending on licence tier.
For instance, the gap is particularly stark at the broker-dealer level, where Nigeria’s $1.33 million requirement is more than three times Kenya’s and significantly higher than comparable liquidity floors in South Africa.
What the SEC’s hike could trigger
The scale of the increase signals a decisive regulatory shift toward larger balance sheets and higher entry barriers.
Analysts say the policy could trigger consolidation, mergers or exits among smaller operators unable to raise fresh capital.
While the SEC maintains that stronger capitalisation will enhance systemic stability and investor confidence, analysts insist the reset raises broader questions about competition, market access and concentration.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
