An Examination of the Legal Framework Governing Securities Regulation and Investor Protection in Nigeria

Securities regulation in Nigeria has been strengthened through the Investment and Securities Act, the Nigerian Exchange Group's listing rules, and the Securities and Exchange Commission's enforcement agenda, yet retail investor protection remains inadequate relative to sophisticated market participants and issuer-side interests. This study examines the adequacy of the ISA 2007 framework and the proposed ISA 2024 amendment in protecting retail investors in the Nigerian capital market. A doctrinal analysis of the ISA provisions, SEC rules, and relevant court decisions from 2018 to 2023 was conducted, supplemented by a survey of 100 retail investors in Abuja. Results indicate that 67 percent of surveyed investors reported difficulty in understanding prospectus disclosure documents. Compensation for investment losses due to misleading prospectus information has never been successfully recovered through civil action in Nigeria. The investor protection fund established under the ISA has limited funding and accessible claim processes are unclear to most retail investors. The study concludes that the ISA framework is structurally adequate but inadequately supplemented by investor literacy infrastructure and accessible claims mechanisms. Recommendations include plain language prospectus requirements, an investor compensation scheme modelled on UK FSCS principles, and mandatory investment advisor qualification requirements for retail investment intermediaries.

Keywords: securities regulation, investor protection, ISA 2007, SEC Nigeria, capital markets