Securities and Exchange Commission has proposed a new regulatory framework setting a minimum capital requirement of N7.5 billion for Free Trade Zone Entities (FTZEs) seeking to raise funds through public offerings.
The move is aimed at strengthening investor protection and ensuring only financially sound companies from free trade zones can access Nigeria’s capital market.
Under the proposed rules, no FTZE will be allowed to issue or offer shares to the public without prior approval from the Commission, in line with provisions of the Investment and Securities Act (ISA) 2025.
The SEC said the new framework establishes clear eligibility criteria and compliance conditions for FTZEs planning to list securities.
Beyond the N7.5 billion minimum paid-up capital threshold, companies must:
- Be licensed by a recognised Free Zone Authority
- Have at least three years of operational track record
- Demonstrate a minimum of two years of active business operations within a free trade zone
- Maintain a competent and experienced senior management team
The proposed rules also introduce stricter disclosure requirements to improve transparency and accountability.
FTZEs will be required to submit verified details of their shareholding structure, including minimum paid-up capital and ownership breakdown, certified by the relevant Free Zone Authority.
Additional requirements include:
- A “No Objection” letter from the Free Zone Authority
- Verified information on board composition
- Mandatory listing of offered shares on a registered securities exchange
The SEC said the reforms are designed to deepen market integrity while opening the door for credible free zone businesses to raise capital.
By tightening entry standards and enforcing robust disclosure, the Commission aims to reduce risks for investors and align Nigeria’s capital market practices with global standards.
The proposal signals a broader push by regulators to balance market expansion with stronger safeguards, particularly as new categories of issuers seek access to public funding.
