Learning Centre
How the Nigerian Stock Market Is Regulated
A plain-English guide to how the SEC, the Nigerian Exchange and CSCS regulate the Nigerian stock market — including KYC, AML, T+1 settlement and how brokers themselves are supervised.
Everything you need to know about SEC, NGX, CSCS and your rights as an investor
SEC Nigeria: the apex regulator
The Securities and Exchange Commission (SEC) is Nigeria's apex capital market regulator, with a mandate to protect investors, maintain fair and efficient markets, and reduce systemic risk. Its powers derive from the Investments and Securities Act (ISA) 2025, which governs the registration of securities, capital market operators (including stockbrokers) and, more recently, digital and virtual asset offerings. SEC investigates market abuse, sanctions erring operators and can suspend or revoke operating licences.
Before opening an account, read our Broker Safety guide for how to independently verify a broker's SEC registration.
The Nigerian Exchange (NGX) and its rules
NGX operates the trading platform where listed equities, bonds and ETFs change hands. It sets listing rules for companies, trading rules for dealing member firms, and market conduct standards such as circuit breakers on extreme price movements. NGX also licenses dealing member firms — the stockbrokers you interact with directly — and can suspend firms that breach its rulebook.
CSCS and central custody
The Central Securities Clearing System (CSCS) Plc clears and settles every NGX trade and holds shares in dematerialised (electronic) form. Each investor has an individual CSCS account number, meaning your shareholding is legally distinct from your broker's own assets and survives even if your broker fails.
Your rights as an investor
- • The right to receive a contract note for every executed trade.
- • The right to a CSCS statement confirming your shareholdings.
- • The right to have your funds held separately from the broker's own funds.
- • The right to lodge a complaint with SEC or NGX and, where necessary, the Investment and Securities Tribunal.
- • The right to compensation from the NGX Investor Protection Fund in cases of proven broker default.
KYC requirements
Know-Your-Customer rules require every broker to verify your identity before you can trade. You'll typically be asked for your Bank Verification Number (BVN), a valid government ID, a passport photograph, proof of address and to open a CSCS number linked to your identity.
AML obligations
Anti-Money Laundering (AML) rules require brokers to monitor transactions for suspicious patterns, report large or unusual transactions to relevant authorities, and periodically re-verify client information — all designed to keep the market free of illicit funds.
T+1 settlement explained
Since November 2023, NGX moved from a T+3 to a T+1 settlement cycle, meaning your trade settles just one business day after execution. This reduces the time your funds or shares are "in transit" and lowers counterparty risk across the market.
T
Trade executed
You buy or sell shares on NGX through your broker.
T+1
Settlement
Cash and shares move between accounts the next business day.
T+1
CSCS credit
Shares are credited to your individual CSCS account.
How stockbrokers themselves are regulated
To operate, a stockbroker must hold a dealing member licence from NGX and be registered with SEC as a capital market operator. Firms must maintain minimum capital adequacy ratios, undergo periodic SEC/NGX inspections, and keep client funds segregated from operating funds. Complaints that cannot be resolved directly with a broker, or through SEC's complaints unit, can be escalated to the Investment and Securities Tribunal (IST) — a specialised body that adjudicates capital market disputes.
Ready to choose a broker with confidence? Browse our directory of SEC-licensed brokers or read our Broker Safety guide for a full due-diligence checklist.
Frequently asked questions
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