The Nigerian securities market supervisor published a new set of rules recently, clarifying that digital assets come under its purview. The regulator defined digital assets as “a digital token that represents assets such as a debt or equity claim on the issuer.”
The new rules of the Securities and Exchange Commission (SEC) of Nigeria clarified the issuance of digital assets in the country, along with regulations on the offerings and custodian platforms.
“These rules shall apply to all issuers seeking to raise capital through digital asset offerings,” the SEC stated.
According to the 54-page-long rule book, the exchanges need to register with the market regulator and furnish information like details of listed digital assets, risk management plans including know-your-customer and disaster management. In addition, they need to provide details on security protocols, including the platform’s architecture and technology and escrow agreement with the custodian.
Further, the Nigerian crypto exchanges need to ensure that they have all the licenses and permits for the issuance and transfer of securities.
Moreover, the rules mandate the exchanges to have a minimum paid-up capital of NGN 500,000 (around $1,204) and a fidelity bond for at least 25 percent.
Strict Listing Rules
Additionally, these platforms need to obtain a 'no objection' letter from the Nigerian securities market regulator to list new digital assets.
Also, the Nigerian SEC clarified limits on the investment in initial digital asset offerings. While there is no restriction for such investments on institutional and high net worth investors, retail investors can only invest a maximum of NGN 200,000 per issuer with a total investment limit of NGN 2 million within a 12-month period.
Nigeria is the largest economy in Africa. The rules around digital assets came when the country is seeing a mass interest in cryptocurrencies like most of the other countries in the region.
