The Securities and Exchange Commission (SEC) has directed all regulated capital market operators in Nigeria to sever correspondent banking relationships with financial institutions linked to North Korea and restrict transactions involving Iran.
The directive, which took immediate effect, is part of efforts to strengthen Nigeria’s anti-money laundering, counter-terrorism financing and counter-proliferation financing controls.
The SEC disclosed the directive in a circular issued to capital market regulated entities on August 14, 2026, although the document was dated June 19, 2026.
The regulator said the measures were based on updated risk assessments issued by the Financial Action Task Force (FATF) following its February 2026 plenary session.
The SEC said the directive was issued under the Investments and Securities Act, 2025, and the SEC Anti-Money Laundering and Countering the Financing of Terrorism Rules and Regulations.
Under the new requirements, capital market operators must apply enhanced controls to transactions and business relationships involving jurisdictions identified as presenting significant money laundering, terrorist financing or proliferation financing risks.
For North Korea, officially known as the Democratic People’s Republic of Korea (DPRK), the SEC ordered regulated entities to completely sever financial relationships with DPRK-linked institutions.
Capital market operators must terminate correspondent banking relationships with financial institutions incorporated in, owned or controlled by individuals or entities in North Korea.
They are also prohibited from establishing or maintaining subsidiaries, branches or representative offices of North Korean financial institutions within their operations.
The SEC further directed operators to restrict or, where necessary, refuse business relationships and transactions involving North Korean nationals, entities, government bodies or individuals acting on their behalf.
The measures effectively shut North Korean financial institutions and related entities out of formal banking and capital market channels operated by Nigeria’s regulated capital market firms.
The SEC also introduced restrictions on dealings with Iranian financial institutions.
Capital market operators have been directed to refuse to process or facilitate transactions involving Iranian financial institutions.
They must also decline to establish or maintain subsidiaries, branches or representative offices of Iranian financial institutions in Nigeria.
In addition, Nigerian capital market firms are expected to avoid establishing or operating branches, subsidiaries or representative offices in Iran where weaknesses in the country’s anti-money laundering, counter-terrorism financing and counter-proliferation financing framework could expose them to compliance risks.
The directive means firms must carefully assess and restrict institutional relationships with Iranian financial entities to ensure they do not breach Nigeria’s AML and sanctions obligations.
