HOW TO OBTAIN A BROKER/DEALER LICENCE IN NIGERIA

Nigeria’s capital market remains one of the most closely monitored sectors of the economy. Given the huge amount of public funds involved and the market risks associated with securities trading, the Securities and Exchange Commission (“SEC”) maintains very strict control with stipulated conditions on who may operate within the market. Getting a Broker/Dealer Licence, which allows a company to trade securities both on behalf of clients and for its own account, is one of the most common entry points for a company seeking to enter the Nigerian capital market. 

In recent years, the SEC has intensified its regulatory oversight, particularly in response to market volatility, investor protection concerns, and the growing refinement of financial products. The foregoing culminated in the issuance of SEC Circular No. 26 on the 16^th of January 2026.  This circular showed a very significant increase in the minimum share capital requirements for several capital market operators, including Broker/Dealers. Given the circumstances, it has become imperative that prospective operators as well as existing operators understand not just what is required but why the requirements exist and the consequences of non-compliance. 

This article gives an insight into how to obtain a broker/dealer licence in Nigeria, the requirements needed for the licensing, the timeline, and the consequences for operating without a licence. 

What is a Broker/Dealer Licence?

A Broker/Dealer licence authorizes a company to act as an intermediary in the buying and selling of securities. Securities here are stocks, bonds, derivatives, shares, etc. 

Essentially, a Broker/Dealer licence enables a company to execute trades on behalf of its clients by acting as a broker, while also engaging in proprietary trading as a dealer. Companies holding these licences are core capital market operators and are central to market liquidity, price discovery, and the overall functioning of the Nigerian securities market. 

Who regulates Broker/Dealer businesses in Nigeria?

Broker/Dealer businesses in Nigeria are regulated by the Securities and Exchange Commission (SEC) pursuant to the Investments and Securities Act (ISA). The SEC is responsible for registering, supervising, monitoring, licensing of all capital market operators to ensure market integrity, investor protection, and systemic stability.

Who can apply for a Broker/Dealer Licence in Nigeria? 

Only a company incorporated in Nigeria is eligible to apply for a Broker/Dealer licence. Individuals are expressly excluded. The applicant company must be properly incorporated under the Companies and Allied Matters Act (CAMA) its memorandum of association must clearly state broker/dealer activities as part of its objects. The SEC pays close attention to corporate structure, ownership, and governance, particularly where foreign shareholding or corporate shareholders are involved.

What is the current minimum capital requirement?

One of the most critical requirements for obtaining a Broker/Dealer licence is capitalisation. Before 2026, the minimum paid-up capital stood at ₦300 million. However, following the SEC Circular No. 26 dated 16^th January 2026, the minimum capital for a Broker/Dealer licence has been increased to ₦2 billion. This capital must be fully paid up, verifiable, and maintained in the company’s bank account throughout the licensing process. The review is part of the SEC’s broader effort to strengthen capital adequacy, enhance investor protection, and align market operators with evolving risk profiles.

The rationale behind this increase is to ensure that broker/dealers have sufficient financial capacity to meet their obligations, absorb operational risks, and protect investors. Companies that are unable to demonstrate this level of capital adequacy will not be considered for registration.

Is insurance required as part of the licensing process?

Yes. In addition to meeting the minimum capital threshold, an applicant must obtain a Fidelity Insurance Bond covering at least 20%. The bond must be valid up to 31^st December of the relevant year and serves as an additional layer of protection against losses arising from fraud, negligence, or operational misconduct, in line with SEC Rules and Regulations.

What pre-licensing registrations that must be completed before applying to the SEC?

Before an application can be submitted to the SEC, the applicant company must complete several preliminary registrations. These include: 

1. Incorporation with the Corporate Affairs Commission (“CAC”): This has to include the Minimum share capital of ₦2 billion, and the company’s objects clause expressly stating that it is a broker/dealer company. 
2. Registration with the Federal Inland Revenue Service(“FIRS”): the company is required to register and obtain its Tax Identification Number (“TIN”) from the FIRS for tax purposes.  
3. Bank Account Opening: Opening and funding a corporate bank account reflecting the paid-up share capital is very important. 
4. Registration with the Special Control Unit against Money Laundering (SCUML): Mandatory anti-money laundering registration is required for regulated financial businesses

These steps establish the company’s legal and regulatory identity and are treated by the SEC as non-negotiable prerequisites.

These steps form the regulatory baseline and must be completed before SEC filing.

What documents are required for the licence application?

1. Forms
2. Duly executed Form SEC 3 for the company.
3. Duly executed Form SEC 2 and 2D for Sponsored Individuals and Directors of the Company. (Note that every potential Capital Market Operator requesting registration for this function is required to have at least three sponsored individuals, one of whom should be a Compliance Officer who shall be responsible for monitoring compliance with the ISA 2007, Rules and Regulations, notifications, guidelines, instructions, etc. issued by the Commission and/or the Federal Government);
4. Duly Executed Form SEC 2B for Transferring Individuals. (Please refer to the requirements for transfer of registration on the Commission’s website for compliance.

B. Directors and Proposed Sponsored Individuals

1. Minimum of three (3) sponsored Individuals, including the Managing Director and the Compliance Officer; (Companies registered/seeking registration to carry out multiple functions shall sponsor the total number of individuals prescribed for each function);
2. The Form SEC 2 should indicate, amongst others, the applicant’s BVN, bank account details, official email address(es) as well as full postal addresses, contact numbers and email addresses of previous employers, bankers and nominated referees;
3. Copies of employment letters and schedule of duties (duly accepted by the employee and signed by both parties, i.e., the employer and the employee).
4. For individuals on transfer, provide evidence of resignation from the previously registered company, evidence of the individual’s notification to the Commission of his/her resignation, and the company’s acceptance of the resignation.
5. Curriculum vitae of all Directors and proposed sponsored individuals, which shall include details of activities, arranged in a chronological order from Secondary School(s) with dates and duration clearly indicated. (Reasons for leaving all previous employment are required to be stated. The duration and gaps in employment and educational history must be indicated and explained).
6. Copies of credentials, including secondary school(s) and NYSC discharge/exemption certificates (originals required to be sighted by an authorized SEC staff).
7. A copy of the Dealership Certificate of the authorized dealing clerk, sponsored by the company.
8. Evidence of change of name where applicable (to be supported with relevant documents, including Court Affidavit and Newspaper publication).
9. A copy of a valid means of identification (International Passport, National Identity Card, Driver’s Licence, permanent voter’s card, Tax Clearance Certificate, or utility payment documents).
10. A copy of residence/Working Permit (for Non-Nigerians/residents), the original copy will be required for sighting by the SEC official.
11. All Sponsored Individuals are required to have relevant post-graduation experience as stipulated in ‘Rule 20’ of the Commission’s Rules and Regulations.

C. Applicant Company

1. Profile of the Company should include, among others, a brief history of the company, organizational and shareholding structure, principal officers, as well as details of past and current activities.
2. The name(s) and address(es) of the company’s subsidiaries, associated and related companies, type of business, and percentage holding.
3. Evidence of Payment of shares allotted to the shareholders.
4. Evidence of a Dealing Licence of an Exchange.
5. Information on subsidiary, associated, and or affiliated/related companies, where applicable.
6. Operational manual or organizational chart of the company.
7. Business plan.
8. Provide information on all the Banks operated by the company from inception, including the account statements not more than three months old as at the time of filing with the Commission.
9. Provide information on the company’s social media handles (e.g., Facebook, Instagram, LinkedIn, etc.).
10. Provide the company’s website address, email address(es), and phone number(s).

D. Corporate Documents

1. A copy of each of the following documents, duly certified by the CAC.
2. A copy of the certificate of incorporation certified by the Corporate Affairs Commission (CAC). Where a copy not certified is filed, the applicant shall present the original copy for sighting by an authorized officer of the Commission.
3. Memorandum and Articles of Association – this should include the power to perform the specified function.
4. CAC documents showing Statement of Share Capital, Return of Allotment, and Particulars of Directors (The original copy of the certificate is to be presented for sighting by an authorized officer of the SEC).
5. Latest audited accounts or statement of affairs for companies in operation for less than one year, signed by two company directors and not more than three (3) months old at the time of filing with the Commission. The statement of affairs must be confirmed with an attestation letter by an external auditor. (The cash assets mix ratio shall be 60% liquid assets and 40% fixed and other assets).
6. A sworn undertaking, confirming to the Commission that all the information provided by the Company, including all Bank information, is true and correct. (to be signed by a Director or company secretary and notarized).
7. Sworn undertaking to keep proper records and render returns as may be specified by the Commission from time to time, signed by a director or the company secretary (to be notarized).
8. Sworn undertaking to abide by the SEC Rules and Regulations and the Investments and Securities Act No.29 of 2007 by a director or the company secretary (to be notarized).

What statutory fees are payable to the SEC?

1. Evidence of Payment of Filing/Application Fee – N100,000.00 (One Hundred Thousand Naira).
2. Evidence of Payment of Processing Fee – N300,000.00 (Three Hundred Thousand Naira).
3. Evidence of Payment of Registration Fee – N5,000,000.00 (Five Million Naira).
4. Evidence of payment of Director’s fee – N100,000.00 (One Hundred Thousand Naira).
5. Evidence of Payment of Sponsored Individuals’ applicable fees as follows:
6. N100,000.00 (One Hundred Thousand Naira) only for each potential sponsored individual.
7. N50,000.00 (Fifty Thousand Naira) for transferring a sponsored individual.
8. N100,000.00 (One Hundred Thousand Naira) only for change of registration.
9. N150,000.00 (One Hundred and Fifty Thousand Naira) for transfer and change of status.

Will the SEC conduct office inspections?

Yes. As part of the licensing process, the SEC conducts physical inspections of the applicant’s office premises. These inspections are designed to evaluate operational readiness, check internal controls, examine the corporate governance structures, record-keeping systems, and review the overall compliance culture. 

Sponsored individuals are also interviewed by the Registration Interview Committee to evaluate their competence, experience, integrity and assess their understanding of the capital market and applicable regulations.

How long does the licensing process take?

The timeline for obtaining the licence varies as it is subject to regulatory discretion; the processing of a Broker/Dealer licence typically takes about 3 to 5 months, and this depends on the completeness of documentation, the Availability of sponsored individuals, and the SEC’s scheduling of inspections and interviews. 

There might be delays, and delays often arise from incomplete documentation, inadequately prepared sponsored individuals, or failure to meet capital verification requirements. 

Is the licence permanent once granted?

No. Broker/Dealer licences are subject to annual renewal, which must be completed on or before 31^st of January each year. Failure to renew may result in sanctions, suspension, and/or withdrawal of the licence.

What are the consequences for operating without a valid Broker/Dealer licence?

Operating as a broker or dealer without a valid licence is a serious regulatory breach. The SEC has in place a wide enforcement powers granted to it under the ISA, including the authority to impose fines, issue cease-and-desist orders, suspend operations, and prosecute defaulting entities and their directors. Also, any transactions conducted without a valid licence may be declared void, and investors who suffer losses may pursue civil claims against the company and its officers.

In addition to regulatory sanctions, unlicensed operations expose promoters and directors to reputational damage and potential criminal liability. In practice, the SEC has shown little tolerance for unregistered capital market activities, particularly where public funds are involved.

CONCLUSION

The SEC’s recent increase in capital requirements signals a clear shift toward stronger, better-capitalised market operators. While the process of getting the licence is rigorous, companies that approach it with proper planning, adequate capitalisation, and professional guidance stand a significantly higher chance of getting the licence. 

For businesses seeking long-term participation in Nigeria’s capital market, a Broker/Dealer licence remains a powerful, albeit highly regulated, entry point.