Guidelines

Regulatory Incubation (RI) Guidelines for Fintech Entrepreneurs

The SEC’s Regulatory Incubation Guidelines provide a streamlined pathway for fintech innovators to pilot new capital-market services under tailored, time-bound provisions. By operating within this framework, entrepreneurs gain early regulatory oversight, clear operational guardrails and a structured path to full registration—advancing Nigeria’s capital market innovation while safeguarding investors and market integrity.

Key Highlights

• Pre-Qualification Requirements: Applicants must employ innovative technology to deliver new or enhanced financial services. Their proposed activities must fall within the SEC’s regulated financial-service scope. They should be ready to launch with live customers and must commit to full registration once the formal rules are in place.
• Regulatory Incubation Operations: Entrants need to demonstrate fitness, integrity and relevant expertise, and must furnish a detailed incubation implementation plan along with full client disclosures. A Nigerian operational presence is required, and participants must comply with AML/CFT rules while submitting monthly performance and compliance reports.
• Restrictions & Conditions: Incubation is strictly limited to the specific approved activity, with no guarantees on financial promotions. Entrepreneurs may onboard up to 100 clients during the incubation period unless the SEC approves an expansion. The program runs for one year, after which full registration must be sought or operations ceased.
• Termination & Withdrawal: The SEC may terminate or suspend incubation if an entrant loses fitness, breaches conditions or deviates from the approved plan, or fails to apply for full registration. Entrepreneurs may also voluntarily exit by notifying the SEC and winding down their operations responsibly.
• Application Form & Fee: Interested parties must complete the prescribed application form and pay a non-refundable processing fee of ₦200,000.
• Implementation Plan Content: The plan must describe the business model and technology stack, clearly set out objectives and timelines, outline a robust risk-management framework with investor-protection measures, detail the customer-communication strategy, and include an exit plan should full registration not be attained.

Nigerian Code of Corporate Governance (NCCG) 2018

The Financial Reporting Council of Nigeria issued the Nigerian Code of Corporate Governance (NCCG) in 2018, replacing all existing sectorial Codes of Corporate Governance in Nigeria. This code mandates that public companies comply with the provisions of the NCCG and the SEC Corporate Governance Guidelines (SCGG).

Key Highlights:

• Comprehensive Standards: The NCCG establishes a robust framework covering various aspects of corporate governance. It sets stringent standards for transparency, accountability, and ethics.
• Compliance: Public companies are legally required to adhere to the NCCG. Non-compliance can result in fines and other sanctions.
• Reporting Template (FORM 01): Download the reporting template (FORM 01) here to ensure your company reports compliance accurately.

Adoption of Nigerian Sustainable Finance Principles

To address challenges such as pollution, climate change, and poverty in the Nigerian Capital Market, the Securities and Exchange Commission has adopted sustainable finance principles.

Key Highlights:

• Environmental Stewardship: These principles aim to achieve economic growth while protecting the environment. They encourage entities to embed Environmental, Social, and Governance (ESG) considerations into their operations.
• Social Development: Sustainable finance promotes social development by financing priority sectors and promoting human rights and financial inclusion.
• Gender Equality: Emphasis is placed on gender equality and transparency in reporting.
• SEC Guidelines on Sustainability: Regulated entities must also adopt SEC guidelines on sustainability.

We are committed to fostering a transparent, sustainable, and responsible financial ecosystem in Nigeria. If you have any questions or need further assistance regarding these guidelines, please don't hesitate to contact us.

Guidance on Implementation of Sections 60 – 63 of Investments and Securities Act 2007

This document provides essential guidance on adhering to Sections 60 to 63 of the Investments and Securities Act 2007. These sections outline specific obligations for public companies regarding the reporting and auditing of their internal control systems.

Key Points:

• Certification in Annual Reports: Public companies must include a certification related to their internal control systems in their annual or periodic reports.
• Directors' Duties: The document elaborates on the responsibilities of directors concerning internal controls within public companies.
• Management's Assessment: It outlines the requirement for management to annually assess and report on the company's internal control over financial reporting.
• Auditor Responsibilities: The document clarifies the duty of auditors in reporting on the internal controls of public companies, including considerations of auditor independence.
• Material Weaknesses: Procedures for identifying and reporting material weaknesses in internal control over financial reporting are detailed.
• Evaluation Methods: The document may provide guidance on methods used for evaluating internal controls.
• Report Location: It specifies where the internal control report should be placed within the annual financial statements.
• Auditor Registration: This section addresses the registration requirements for auditors of public companies.

In summary, this document serves as a comprehensive guide for public companies to ensure compliance with Sections 60 to 63 of the Investments and Securities Act 2007, focusing on the reporting and auditing of internal control systems in accordance with regulatory requirements.