The Securities and Exchange Commission (SEC) refined its capital reforms after extensive consultations with market operators.
Specifically, fund and portfolio managers must now hold 0.1% of Assets Under Management (AUM) as capital.
SEC Clarifies AUM Capital Rule
Previously, the SEC stated the requirement as 10% in its January 16, 2026 circular.
Afterwards, senior Commission sources confirmed the correction to newsmen.
Meanwhile, SEC Director-General Dr Emomotimi Agama will formally announce the change next week.
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Overall, the issue emerged from the SEC’s broader drive to strengthen investor protection and market resilience.
As a result, the Commission raised capital thresholds across nearly all capital market segments.
Under the framework, Tier 1 fund and portfolio managers must still maintain ₦5 billion minimum capital.
In addition, firms managing over ₦100 billion face an AUM-linked capital buffer.
However, the AUM requirement quickly became the reform’s most controversial element.
At 10%, operators argued the rule ignored asset managers’ fiduciary business model.
Consequently, large firms faced capital demands exceeding those of Nigeria’s largest banks.
For example, a firm managing ₦11 trillion required ₦1.1 trillion in regulatory capital.
After the revision to 0.1%, the requirement dropped sharply to ₦11 billion.
Therefore, industry leaders say the change restores regulatory and commercial balance.
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What Remains Under Review
Elsewhere, other capital requirements remain unchanged across the market.
Brokers must hold ₦600 million, while dealers must hold ₦1 billion.
Similarly, broker-dealers must maintain ₦2 billion in capital.
Depending on licence scope, issuing houses must hold between ₦2 billion and ₦7 billion.
Likewise, digital asset platforms must maintain ₦2 billion in capital.
Notably, the SEC gave all firms until June 30, 2027 to comply.
Although operators support the SEC’s objectives, they criticised the original capital increases.
In response, a policy memorandum reviewed by newsmen challenged the initial framework.
The memo argued that fund managers act as fiduciaries, not principal risk-takers like banks.
Using financial modelling, it showed weak returns under the original rules.
For instance, a Tier 1 manager with ₦50 billion in AUM earned just 7% return on capital.
Importantly, that return fell below Nigeria’s risk-free rate.
As a result, the memo warned of reduced growth and weaker competition.
Ultimately, the SEC’s adjustment represents a pragmatic course correction.
Analysts now say the revision aligns Nigeria with international regulatory standards.
Globally, regulators link capital to operational risk, not total client assets.
Nevertheless, concerns remain over the flat ₦5 billion Tier 1 capital floor.
Some operators argue it still favours large, bank-owned firms.
Accordingly, calls for a graduated, risk-based model will likely continue.
Beyond asset managers, the reforms also integrate fintechs and digital asset platforms.
As 2027 approaches, attention will shift toward implementation and further regulatory fine-tuning.
