The Securities and Exchange Commission (SEC) has issued Circular No. 26-1, raising minimum capital requirements for all capital market operators (CMOs) in the most sweeping revision since 2015.
Enacted under the Investments and Securities Act 2025, which expanded the SEC’s mandate to regulate emerging areas like digital assets and fintech, the goal is to bolster market resilience and foster orderly growth in new segments such as digital assets and commodities.
Key Changes to Capital Requirement
| Category | Previous Requirement | New Requirement | Increase Multiple | Approx. USD Equivalent* |
|---|---|---|---|---|
| Broker (Client Execution) | ₦200m | ₦600m | 3x | ~$422,000 |
| Dealer (Proprietary Trading) | ₦100m | ₦1bn | 10x | ~$704,000 |
| Broker-Dealer (Full Services) | ₦300m | ₦2bn | ~6.7x | ~$1.4m |
| Inter-Dealer Broker | ₦50m | ₦2bn | 40x | ~$1.4m |
| Tier-1 Portfolio Manager (Large AuM) | ₦150m | ₦5bn | ~33x | ~$3.5m |
| Tier-2 Portfolio Manager | ₦150m | ₦2bn | ~13x | ~$1.4m |
| Private Equity Fund Manager | ₦150m | ₦500m | ~3.3x | ~$352,000 |
| Venture Capital Fund Manager | ₦20m | ₦200m | 10x | ~$141,000 |
| Issuing House (No Underwriting) | ₦200m | ₦2bn | 10x | ~$1.4m |
| Issuing House (With Underwriting) | ₦200m | ₦7bn | 35x | ~$4.9m |
| Registrar | ₦150m | ₦2.5bn | ~16.7x | ~$1.8m |
| Rating Agency | ₦150m | ₦500m | ~3.3x | ~$352,000 |
| Trustee | ₦300m | ₦2bn | ~6.7x | ~$1.4m |
| Digital Asset Exchange / Custodian | ₦500m | ₦2bn | 4x | ~$1.4m |
| Digital Asset Offering Platform | ₦500m | ₦1bn | 2x | ~$704,000 |
| Robo-Adviser | ₦10m | ₦100m | 10x | ~$70,000 |
| Crowdfunding Intermediary | ₦100m | ₦200m | 2x | ~$141,000 |
| Central Counterparty (CCP) | ₦5bn | ₦10bn | 2x | ~$7m |
| Composite Securities Exchange | ₦500m | ₦10bn | 20x | ~$7m |
What This Means for Capital Market Operators
Traditional Brokers & Dealers
Smaller brokers handling only client trades face a manageable tripling of capital, but full-service broker-dealers and inter-dealer brokers must raise 6–40 times more. Many mid-tier firms may struggle, likely leading to **mergers, acquisitions**, or exits. Larger, well-funded players will gain market share, creating a more concentrated but stable brokerage landscape.
Fund & Portfolio Managers
Tier-1 managers overseeing billions in assets now need ₦5bn — a massive jump that rewards scale. Smaller managers may consolidate or shift to niche areas. Private equity and venture capital firms face higher barriers, potentially slowing early-stage funding but attracting more institutional capital.
Issuing Houses & Underwriters
The ₦7bn threshold for underwriters is the steepest increase overall (35x). Only the largest firms or those with strong banking ties will remain in underwriting, while advisory-only houses face a more feasible ₦2bn. Expect fewer but more robust IPOs and bond issuances.
Digital Assets & Fintech (VASPs)
For the first time, crypto exchanges, custodians, and offering platforms are formally regulated with ₦1–2bn requirements. This legitimizes the sector post-2025 legalization but raises entry barriers significantly. Early-stage startups may face consolidation or partnerships with bigger players, while well-funded foreign entrants could dominate. Robo-advisers and crowdfunding platforms see 2–10x hikes, pushing out undercapitalized apps.
Market Infrastructure
Exchanges and clearing houses now require ₦5–10bn, ensuring they can handle the market’s rapid growth without systemic risk.
Benefits of Recapitalization
Consolidation Wave — Many smaller operators may merge, sell, or exit, leading to a leaner, more professional market.
Investor Protection — Higher capital buffers reduce the risk of firm failures, protecting client funds during market stress.
Innovation vs. Stability — While the rules support orderly growth in digital assets and commodities, critics argue the thresholds could stifle local fintech innovation, favoring well-capitalized (often foreign-backed) players.
Timeline & Flexibility — Firms have until June 30, 2027 to comply. The SEC promises case-by-case transitional relief and separate guidance on verification.
