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The Association of Securities Dealing Houses of Nigeria (ASHON) has called for a mandatory protocol requiring sector regulators to notify the Securities and Exchange Commission (SEC) and the Nigerian Exchange Limited (NGX) before taking final regulatory action against listed companies.
ASHON said the protocol was necessary to protect investors and prevent regulatory actions from disrupting the value and status of companies whose shares are publicly traded. The association made the call following the revocation of Universal Insurance Plc’s operating licence by the National Insurance Commission (NAICOM) on August 14, 2026, the same day the insurer announced a binding agreement to raise N7.128 billion through a private placement to meet recapitalisation requirements.
In a statement signed by its chairman, Sehinde Adenagbe, ASHON said the timing of the licence revocation raised questions about investor protection, market integrity and coordination between sector regulators and capital market authorities.
The association said any regulatory decision affecting the licence, solvency or existence of a listed company has implications beyond the company and the sector regulator because such firms form part of the public market infrastructure. “There must be a formal and mandatory protocol requiring the relevant sector regulator to notify the SEC and NGX before taking final action against a listed entity,” ASHON said.
It proposed that exceptions to the notification requirement should be limited to cases involving an immediate threat to systemic stability or the need to preserve evidence. According to the association, the Universal Insurance case illustrates the need for such coordination. The company had disclosed to NGX on August 14 that it entered into a binding investment agreement for N7.128 billion through a private placement which, upon completion, would give the investor a 50.1 per cent majority stake.
The company also stated that the required board and shareholder approvals had been obtained. However, NAICOM cancelled the company’s registration on the same day, pursuant to a notice dated August 13, 2026, and subsequently appointed a receiver/provisional liquidator.
ASHON said the sequence of events could create uncertainty for shareholders and other market participants, particularly where investors had acquired or traded the company’s shares without knowledge of a regulatory decision that could materially alter the company’s status.
“Our concern is not with recapitalisation or prudent regulation. Our concern is with regulatory processes that may achieve the opposite of their intended objective by destroying value, unsettling investors and undermining confidence in publicly traded companies,” it stated.
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The association said regulatory authorities should consider the effect of their actions on shareholders, stockbrokers and other capital market participants before taking decisions that could affect listed companies.
It also proposed a graduated regulatory-resolution framework before licence cancellation, comprising enhanced supervision, capital-restoration plans, time-bound recapitalisation windows and controlled changes in ownership.
ASHON said the approach would give financially distressed institutions an opportunity to restore their capital position or resolve ownership issues before the final withdrawal of their licences, where circumstances permit.
It further called on NAICOM and the Federal Ministry of Finance to review the circumstances surrounding the Universal Insurance licence revocation, while urging the SEC to investigate the timing and dissemination of the decision.
The association also pointed to the SEC’s Regulatory Hub, launched in December 2025, as a platform that could support greater coordination among regulators. It said the technology should be backed by binding operating procedures that clearly define how information on listed companies should be shared among regulators.
ASHON warned that inadequate coordination could expose investors and stockbroking firms to losses arising from regulatory decisions that are not communicated to the capital market in sufficient time.
“The last thing the market needs is a situation in which an ordinary investor buys shares of a listed company in good faith, through a regulated Stockbroker, only to discover shortly afterwards that a regulatory decision had already been taken which fundamentally altered the status and value of that investment.” It added that stockbroking firms were also exposed to the consequences of such regulatory actions, particularly as they are raising capital under the SEC’s 2026 revised minimum-capital framework.
ASHON maintained that recapitalisation and regulatory intervention should be structured to preserve institutional value and protect investors, rather than create additional uncertainty in the market. “recapitalization should strengthen institutions, not destroy value. Regulation should protect the market, not inadvertently destabilize it.”
