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Regulatory safeguards, enforcement powers and investor redress mechanisms are central to protecting small shareholders, but their effectiveness depends on how consistently they are applied. The protection of minority investors remains an important test of the effectiveness of Nigeria’s capital market regulation, particularly in ensuring that shareholders with small holdings receive fair treatment, have access to relevant corporate information and can seek redress when their rights are breached.
The Securities and Exchange Commission (SEC), as the market regulator, has powers to supervise operators, investigate suspected infractions and take enforcement action against parties found to have violated capital market rules. However, the strength of the framework is measured not only by the laws and institutions in place, but also by how effectively investors can use them when disputes arise.
The Investments and Securities Act (ISA) 2025 provides the current statutory foundation for the Commission’s regulatory responsibilities. It empowers the SEC to inspect regulated entities, investigate suspected violations and impose sanctions in accordance with the law. The Act also provides for the regulation of capital market operators, including their obligations to maintain proper records and protect clients’ assets.
SEC’s timely intervention and redress
One of the practical measures of investor protection is the ability of the regulator to intervene when shareholders complain of misconduct or the mishandling of their investments. The SEC’s published litigation records contain examples of cases in which the Commission investigated complaints and directed corrective action. In a dispute involving Wema Bank Plc, an investor complained that the bank had failed to return N59.17 million representing the value of shares for which payment had been made but which were not allotted.
According to the SEC’s account, its investigation found that the investor had paid N95.16 million for more than 20.5 million shares but received only about 7.2 million units. The Commission directed the bank to refund the outstanding N59.17 million and imposed a daily penalty for the infraction. The Investments and Securities Tribunal subsequently affirmed the Commission’s findings and directed the refund, alongside N200,000 in damages.
The case illustrates how the regulator’s intervention and the Tribunal’s review can provide a route to redress for an investor dealing with a larger market institution. The Commission also provides guidance for investors who believe they have suffered losses through fraud, misrepresentation or other malpractice. Its published guidance advises affected investors to assemble relevant documents, report the matter through the SEC’s complaint channels and provide details of the alleged misconduct and financial impact. The availability of a complaint channel, however, is only one part of the process. The speed of investigation, communication with complainants and implementation of decisions are equally important in determining whether investors obtain meaningful relief.
Unclaimed dividends remain a test
The handling of unclaimed dividends is another area in which the effectiveness of investor protection can be assessed. For many retail investors, dividends represent a direct return on their investments, and delays or difficulties in accessing such payments can weaken confidence in the market.
In a circular issued on June 5, 2025, the SEC addressed the treatment of dividends that had remained unclaimed for several years. It said dividends of quoted public companies that had remained unclaimed for six years or more were expected to be transferred to the Unclaimed Funds Trust Fund under the Finance Act 2020, to be held in trust pending claims by shareholders.
The Commission also directed “public companies and registrars to continue honouring shareholders’ requests for payment while the Federal Government worked towards setting up and operationalising the trust fund.”
The SEC’s e-Dividend Mandate Committee report, presented in May 2025, provides an indication of the progress and outstanding challenges in recovering unclaimed dividends. The report said about 2.5 million shareholders had mandated their accounts through the e-Dividend Mandate Management System and received unclaimed dividends electronically.
It also reported that a forbearance window facilitated the consolidation of about 47,583 multiple accounts involving 6.116 billion units of shares. However, the committee identified identity-management problems and the need for wider investor education as continuing challenges. These figures point to progress in improving access to dividends, but they also show that the process still depends on effective coordination among registrars, banks, the Central Securities Clearing System (CSCS) and investors themselves.
SEC cracks down on illegal schemes
The Commission’s enforcement activities have also focused on preventing members of the public from being drawn into unregistered investment schemes and misleading securities promotions.
In May 2026, the SEC warned Nigerians against investing in unregistered online platforms and schemes promising unrealistic or guaranteed returns. It reminded the public that only entities registered by the Commission are authorised to promote investment services, provide investment advisory services or solicit funds from the public in the Nigerian capital market.
The warning followed concerns about the growing promotion of such schemes through social media platforms, including WhatsApp, Instagram, Telegram, Facebook and TikTok. The Director-General of SEC, Emomotimi Agama at a symposium of the Association of Issuing Houses of Nigeria held in Lagos recently, said the success of the capital market is hinged on how proactive the Commission is at regulation, rather than just creating an environment for participation alone.
“Protection without access is a locked gate. We must deliver both,” Agama said, calling for wider investment access, stronger enforcement against fraud and unregistered operators, and improved financial literacy. He emphasized the need for a market in which investors are not only encouraged to participate but are also assured that their interests will be protected.
In another intervention, the Commission, on June 23, 2026, issued cease-and-desist directives over the premature promotion of a purported public offering by Dangote Petroleum Refinery and Petrochemicals FZE.
The SEC said no application for the registration of an initial public offering or public offer of the refinery’s shares had been filed with or approved by the Commission at the time. It warned that the circulation of promotional materials and the solicitation of advance subscriptions could mislead investors, distort market expectations and create information asymmetry. The regulator directed capital market operators involved in the activities to stop the promotions, remove unauthorised materials and return funds collected in connection with the purported offer.
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The intervention demonstrated the SEC’s role in checking activities capable of exposing investors to misleading offers, particularly where online platforms and aggressive marketing are involved.
Effectiveness of operational framework
While the SEC has established complaint channels, enforcement procedures and mechanisms for addressing issues such as unclaimed dividends, the effectiveness of these measures ultimately depends on their implementation and the outcomes recorded.
The SEC has also consistently pursued investor education through public enlightenment campaigns, investor clinics and outreach programmes designed to help Nigerians understand their rights, identify fraudulent schemes and recover investments due to them.
In October, the Commission held a nationwide Market Outreach Programme on Unclaimed Funds in Lafia, Nasarawa State, to educate residents on recovering unclaimed dividends and other investments, updating shareholder records and avoiding fraudulent investment schemes. The programme brought together representatives of the SEC, probate registry, capital market registrars and other institutions involved in the recovery of investors’ assets.
For minority shareholders, protection goes beyond preventing outright fraud. It also involves ensuring access to timely and accurate information, fair treatment in corporate decisions, proper handling of dividends and investments, and effective remedies when their interests are prejudiced.
The Commission’s published records show that it has intervened in disputes and issued directives against operators and promoters. However, the available examples do not, on their own, establish how quickly complaints are resolved, how many investors obtain full redress or how consistently regulatory decisions are enforced. Those outcomes remain important measures for assessing whether the existing framework is delivering adequate protection to smaller investors
Registrars should embrace
The Securities and Exchange Commission (SEC) has urged capital market registrars to embrace artificial intelligence (AI), digital assets and automation or risk being left out of emerging opportunities in the financial market.
The Director-General of SEC, Dr. Emomotimi Agama, who spoke at the 15th Annual Conference of the Institute of Capital Market Registrars (ICMR), said the industry must reposition itself to remain relevant as technology reshapes securities administration and the wider capital market.
Agama, who was represented by the Head of SEC’s Lagos Zonal Office, John Briggs, said the minimum capital requirement for registrars had been increased from N150 million to N2.5 billion under the Investments and Securities Act 2025, with full compliance expected by June 30, 2027. He, however, stressed that stronger capital bases must be matched with investments in technology and improved service delivery.
According to him, artificial intelligence and digital assets will define the next phase of the capital market, requiring registrars to clean and enrich shareholder registers, prevent fraud, automate corporate actions and provide services at scale, including in local languages.
Agama also urged registrars to intensify efforts towards resolving the issue of unclaimed dividends, estimated at about N270 billion, noting that technology would be critical to improving shareholder identification and dividend administration.
On digital assets, he said tokenisation was entering the regulated mainstream, urging registrars to position themselves as transfer agents for tokenised securities, administrators of programmable corporate actions and partners in fractional ownership. “If registrars do not build this bridge, others will build it without you,” he warned.
Also speaking, Chairman of Nigerian Exchange Group (NGX Group), Umaru Kwairanga, said registrars had demonstrated their capacity to handle large-scale digital transactions through the Dangote Refinery public offer, which was conducted electronically. He said NGX was ready for allotment within 24 hours after the offer, compared with the one month previously required, describing the development as evidence of the changes technology could bring to capital market operations.
Kwairanga urged registrars to abandon manual processes and embrace digitalisation, cybersecurity and artificial intelligence, while completing their recapitalisation to improve efficiency and service delivery. He described registrars as custodians of the wealth of individuals and corporate organisations, responsible for maintaining accurate ownership records and ensuring seamless transfer of securities.
Earlier, President and Chairman of Council of ICMR, Catherine Nwosu, said recapitalisation alone could not guarantee the long-term sustainability of registrar institutions.
Speaking on the theme, “Beyond Recapitalisation: Building Resilient Institutions and Sustainable Capital Markets,” she said the industry must look beyond stronger capital bases to investments in technology, cybersecurity, data integrity, efficient service delivery and innovative shareholder engagement. “What happens after recapitalisation? Is a stronger capital base, on its own, sufficient to guarantee institutional resilience?” she asked.
The conference also featured the investiture of Fellows and induction of Associates of the Institute, which marked 15 years of its professional and institutional development.
