THE Nigerian Senate has passed the Investments and Securities Bill (ISB) 2024 to boost operations in the Nigerian capital market.

The bill, meant to repeal the Investments and Securities Act (ISA) 2007, was passed on the floor of the Senate on Wednesday, December 4.

It is aimed to protect investors and eliminate fraudulent dealings in the capital market.

It is also aimed to transform the capital market, encourage the influx of foreign investors as well as boost investors’ confidence, among others.

“The bill seeks to repeal the existing Investments and Securities Act 2007 and to establish a new market infrastructure and wide-ranging system of regulation of investments and securities businesses in Nigeria, especially in the areas of derivatives, systematic risk management, financial market infrastructure and Ponzi scheme and platforms.

“It was meant to establish the Securities and Exchange Commission as the apex regulatory authority for the Nigerian Capital Market. It will be a regulation of the market to ensure capital formation, the protection of investors, maintenance of fair, efficient and transparent market, and reduction of systemic risk,” the chairman of the Senate committee on the capital market, Osita Izunaso, said while leading debate on the bill.

He said further that the ISB’s main objective was to enact legislation that aligned with global dynamics relating to the regulation of capital markets through the provision of an innovative regulatory framework.

“It will protect the integrity of the security market against all forms of market abuse and insider dealing. It will prevent unauthorised, illegal, unlawful, fraudulent and unfair trade practices, relating to securities and investments,” Izunaso stated.

He added that the overriding purpose of the proposed legislation was to strengthen the capacity of the commission for the effective performance of its statutory mandate as well as reposition that vital sector of the economy for national economic transformation.

The director general of Security and Exchange Commission (SEC) Emomotimi Agama, at a recent conversation, hinted at the harsher penalties for Ponzi scheme operators through the ISB 2024, adding that it mandates a minimum fine of N20 million or up to 10 years in prison or both.

Agama said the bill explicitly prohibited Ponzi and pyramid schemes, fortifying protections for investors against illegal fund managers.

A notable amendment in ISB 2024 will allow the investor protection fund (IPF), established by securities exchanges, to cover investor losses linked to the deregistration of brokerage firms, extending beyond the current coverage of bankruptcy or negligence cases.

“This bill’s passage would be pivotal in setting Nigeria on the path to a world-class capital market,” Agama said.

In an interview, a capital market operator, David Adonri, told The ICIR that the ISA 2007 had become obsolete and needed to be repealed.

“As things change from time to time the law also has to be in tandem with the changes that are occurring in the market. We hope that the President will ascend to it.

“The capital market is faced with risks, one of such is tackling Ponzi schemes. With the new bill, those operating Ponzi can be indicted and punished for defrauding people,” he said.