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By Chukwuma Umeorah
Capital market operators are pushing for a new regulatory approach that promotes collaboration and faster resolution of disputes, arguing that overlapping rules and prolonged conflicts are hurting investor confidence, slowing transactions and undermining the efficiency of Nigeria’s securities market.
Their position was amplified by the chairman of the Association of Securities Dealing Houses of Nigeria (ASHON), Sehinde Adenagbe, in an interview at the weekend.
Adenagbe said regulation remains central to market stability but stressed that policy making must increasingly be consultative and responsive to market realities.
“Regulation is essential for market stability, and we acknowledge progress made by regulators. We advocate for more collaborative policy making, especially regarding broker operations, cross-boarder transactions and incentives for capital,” he said.
He added that slow and cumbersome dispute-resolution processes have continued to undermine confidence among retail and institutional investors, noting that ASHON would prioritise engagement with regulators to address the gaps. “We will work with regulators to strengthen the dispute-resolution framework, establish faster mediation channels, clarify escalation procedures, and ensure investors receive prompt and fair hearings,” Adenagbe said.
He also addressed the ongoing discussion around the recapitalisation of stockbroking firms, warning that abrupt implementation could disrupt the industry. “Recapitalisation is essential but must be practical. A phased or tiered approach allows firms of different sizes to meet new capital requirements gradually,” he said.
According to him, the Securities and Exchange Commission (SEC) should provide a clear transition framework. “SEC should give a considerable cool-off period for the exercise to go through. Clear timelines, transparent guidelines, flexible compliance windows, and incentives such as reduced fees, low-interest financing, and support for mergers can ease the process,” Adenagbe said, adding that continuous stakeholder engagement would be necessary to ensure recapitalisation strengthens the market without constraining growth.
His comments come against the backdrop of a historic year for the Nigerian Exchange Limited (NGX), which delivered one of its strongest performances in nearly two decades. The NGX All-Share Index rose 51.19 per cent in 2025 to close at an all-time high of 155,613.03 points, placing Nigeria among the world’s best-performing emerging and frontier markets during the year.
According to Adenagbe, the rally reflected improving confidence, macroeconomic adjustments and structural reforms that have supported liquidity and re-rated asset prices. He attributed the performance to “broad investor confidence, macroeconomic stability and structural market reforms that boosted liquidity and valuations,” noting that consumer goods, insurance, industrial and banking stocks were among the major contributors to the rally.
He cited recent reforms, including the Investment and Securities Act (ISA) 2025, foreign-exchange market adjustments and exchange-rate unification, as measures that have improved market integrity, broadened product offerings and strengthened investor protection. He also pointed to Nigeria’s removal from the Financial Action Task Force (FATF) grey list in October 2025 as an important signal for cross-border transactions and foreign participation.
While acknowledging the gains, Adenagbe said the market still faces structural and macroeconomic challenges that must be addressed to attract long-term capital. “Key challenges include macroeconomic instability, low financial literacy, inconsistent policy signals, and gaps in technology infrastructure. Together, these factors dampen investor confidence and limit the market’s ability to attract long-term capital,” he said.
He noted that inconsistent policy announcements in the past have triggered sharp market reactions, citing the episode around capital gains tax (CGT). “We need more clarity on the issue of capital gains tax (CGT), which dragged the market down by about N4.8 trillion in a single market day,” he said, arguing that clearer guidance and structured consultations would reduce uncertainty and volatility.
On the regulatory front, Adenagbe described ISA 2025 as a landmark reform that expands the definition of securities, strengthens investor protection and brings new products, including digital assets, under formal oversight. He said the law also enhances the Securities and Exchange Commission’s (SEC) supervisory powers and supports Nigeria’s reintegration into the global financial system.
However, he stressed that effective implementation would matter more than legislation alone. ASHON, he said, would push for stricter compliance reviews, faster reporting timelines and unified digital reporting platforms to reduce information gaps and improve transparency.
Foreign investors, according to Adenagbe, will continue to play a critical role in market depth and liquidity, particularly as Nigeria seeks to rebuild offshore participation. “Foreign investors remain crucial for liquidity and market depth. We are working to ensure Nigeria’s investment climate aligns with global best practices, particularly in governance, transparency, macroeconomic stability, and ease of capital repatriation,” he said.
He added that recent market-infrastructure upgrades, including the introduction of a T+2 settlement cycle, are expected to make the market more attractive to offshore funds by improving efficiency and reducing counterparty risk.
Technology, he said, would be central to ASHON’s agenda. “We will champion modernised trading infrastructure, support fintech partnerships, and promote the responsible use of AI in risk management and market surveillance. These measures will improve efficiency, reduce errors, and enhance the trading experience,” Adenagbe said.
He explained that the association plans targeted financial-literacy campaigns, partnerships with schools and universities, and digital outreach aimed at younger demographics. ASHON also intends to work with the Central Securities Clearing System (CSCS) to shorten account-opening timelines and simplify onboarding processes.
Adenagbe said the association would focus on capacity building and operational resilience. “We will provide capacity-building programmes, professional training, compliance support, and access to modern trading tools. We will also engage government authorities to help firms access incentives and funding to strengthen their capital base,” he said.
While expressing optimism for the market in 2026, he said ASHON would work to build a structured engagement framework involving regulators, listed companies, investment banks, registrars and custodians, aimed at coordinating reforms, improving the investor experience and strengthening market efficiency.
Adenagbe noted that despite near-term macroeconomic pressures, the recent performance of the NGX demonstrates the market’s underlying resilience. He maintained that consistent policies, collaborative regulation and credible enforcement mechanisms, particularly around dispute resolution would be critical to sustaining momentum and positioning Nigeria’s capital market as a reliable channel for long-term investment.
