SEC Urges Unregistered Fintechs to Apply For Its Regulatory Incubation Programme as it Opens Portal

The Nigerian Security and Exchange Commission (SEC) has urged unregistered fintech innovators to apply for its regulatory incubation program as it opens portal for firms operating or seeking to operate in the Nigerian capital market.

SEC via a circular disclosed that the decision to open its portal emanated from a 2021 circular where it announced the imminent roll-out of the RI program for fintechs seeking to operate in the Nigerian capital market.

The circular reads,

“Please refer to the Securities and Exchange Commission (SEC) circular of June 2021 announcing its regulatory incubation (RI) program for Fintech firms operating or seeking to operate in the Nigerian capital market. This is to inform you that the portal for submitting applications is now ready to receive applications from cohort 001/23, from 28/04/2023 to 26/05/2023. Cohorts will be announced at specific times”.

Eligibility Criteria

SEC disclosed that companies that are interested in registering must meet five eligibility criteria which are listed below;

1.) Applicants must show that their innovation is for application in the Nigerian market.

2.) Safe for Investors.

3.) Introduce a new product/process to serve specific investors’ needs.

4.) Able to solve existing compliance or supervisory issues.

5.) Product must be ready for Testing.

Who Can Apply?

SEC identifies those that can apply as follows;

1.) Registered Capital Market

2.) Unregistered fintech innovators that require regulation.

3.) Firms of all sizes that want to enhance investor participation in the country’s capital market.

SEC further issued a disclaimer that fintech in Crowdfunding, Robo advisory/Digital investment advisory, and sub-broker serving multiple brokers using a digital platform should not apply as they already have regulations.

Investors King understands that SEC regulatory incubation (RI) program is designed to address the needs of new business models and processes that required regulatory authorization to continue carrying out full or ancillary technology-driven capital market activities. The commission believes that the driver to transforming Nigeria into a smart financial Centre is the provision of a regulatory environment that is conducive to innovative use of technology.