Accelerated Regulatory Incubation Program (ARIP) Checklist for VASP Onboarding

The Accelerated Regulatory Incubation Program (ARIP) Framework is designed to fast-track qualified entities into the Nigerian capital market while ensuring market integrity, investor protection and operational resilience. By participating in ARIP, Virtual Asset Service Providers (VASPs) and Digital Investment Services Providers (DISPs) benefit from:

• Regulatory Guidance: Early insight into Securities and Exchange Commission (SEC) expectations on governance, risk management and compliance.
• Operational Readiness: A structured pathway—from initial assessment through approval-in-principle to full registration—minimizing time to market.
• Regulatory Intelligence: A collaborative feedback loop enabling the SEC to refine digital asset regulations based on real-world business models.

This checklist distils the ARIP Framework’s key elements into an actionable guide for CMOs and compliance teams, ensuring you enter and exit the incubation period equipped to meet all legal, financial and operational obligations.

Checklist Summary

1. Preamble & Legal Authority

• Statutory Basis: SEC derives onboarding authority from the Investments and Securities Act (ISA) 2007, Section 38.
• Scope: ARIP applies to any VASP or DISP offering services in or to Nigeria, whether local or foreign.

2. Purpose & Objectives

• Accelerate Onboarding: Obtain Approval-in-Principle (AIP) pending full rule commencement.
• Capacity Building: Receive pre-operational guidance on compliance, risk and reporting.
• Regulatory Feedback: Inform future Digital Assets Rules with industry insights.

3. Definitions & Applicability

• Key Terms: AIP, Eligible Applicant, Qualified Applicant, Digital Investment Platform.
• Who Qualifies: Entities incorporated in Nigeria (or actively serving Nigerian investors), promoters, issuers, trading platforms, custodians, advisers.

4. Eligibility Criteria

• Nigerian incorporation with resident CEO/MD
• Pending or intended VASP/DISP registration
• Demonstrated capacity to perform securities business

5. Application Process

1. Initial Assessment: Submit online form via SEC ePortal.
2. Eligibility Notification: SEC reviews and confirms eligibility.
3. Formal Application: Complete ARIP application upon clearance.
4. AIP Issuance: Operate under ARIP for a Commission-determined period.
5. Deferral/Denial: SEC may defer or reject with written reasons.

6. Required Documentation

• Sworn undertakings on accuracy, fitness-and-proper status and solvency
• Operational/business plan and risk management framework
• Corporate documents (Incorporation, M&A, share capital, audited accounts)
• Sponsored individuals (minimum of four principal officers)
• “No objection” from other sectoral regulators, if applicable
• Evidence of NFIU registration

7. Fees & Financial Requirements

• Processing Fee: ₦2,000,000 non-refundable
• Shareholder Funds: Evidence of required capital and fidelity bond
• Additional Requirements: Commission may impose further financial conditions

8. Reporting & Monitoring

• On-site/Off-site Reviews: Weekly/monthly trading stats, quarterly financial & compliance reports
• Incident Reporting: Fraud, operational incidents, customer complaints
• SEC Access: Unrestricted audit and inspection rights

9. Controls, Conditions & Restrictions

• Risk management framework with investor protection measures
• AML/CFT/CPF compliance (including travel rules)
• Prohibitions on unauthorized activities, misleading communications, rapid customer growth

10. Termination & Suspension

• Grounds include unfitness, breach of conditions, insolvency, misconduct, data breaches
• Written notice with reasons; right to be heard before withdrawal

11. ARIP Operational Plan Requirements

• Business model description, technology stack, customer profile
• Detailed risk controls, investor/data protection, communication strategy
• Exit plan if full registration is not achieved

12. Transition to Full Registration

• Seamless shift to formal SEC registration or adoption of new regulations
• Possible denial if regulatory standards are unmet
• Sponsored-individual training and examination pathway

13. Penalties & Sanctions

• Initial Penalty: ₦5,000,000 for first default; ₦200,000 per day thereafter
• Unauthorized Operators: ₦20,000,000 (commercialized VASPs); ₦10,000,000 (other digital platforms)
• Additional sanctions (e.g., suspension) under SEC Rules

14. Confidentiality

• Applicants must label non-public submissions “Confidential”
• SEC to treat marked information as confidential, except as required by law

You can download the full Accelerated Regulatory Incubation Program (ARIP) Framework for detailed guidance and templates

This checklist equips VASPs and DISPs with a clear path to engage the SEC’s incubation program, ensuring that from initial assessment to full registration, you remain compliant, transparent and investor-centric. For further assistance or inquiries, please contact the SEC Innovation Office at innovation@sec.gov.ng or fintech@sec.gov.ng.