May 2, 2023

SEC commences regulatory incubation for Fintechs

SEC used N8bn of N9bn revenue to service staff — SENATE

By Nkiruka Nnorom

The Securities and Exchange Commission (SEC) has opened the Regulatory Incubation (RI) programme for FinTech firms operating or seeking to operate in the Nigerian capital market. 

This was contained in a Circular released by the Commission.  According to the circular, the portal would be opened from the 28th of April, 2023 to the 26th of May, 2023 and registered capital market operators as well as unregistered Fintech innovators that require regulation are encouraged to apply.

The SEC said the move to open a portal comes from a 2021 circular where the Commission announced the imminent roll-out of the SEC Regulatory Incubation (RI) programme for FinTechs operating or seeking to operate in the Nigerian Capital Market. “The Regulatory Incubation (RI) program, according to the SEC, is designed to address the needs of new business models and processes that require regulatory authorisation to continue carrying out full or ancillary technology-driven capital market activities. 

“The RI Program has thus been conceived as an interim measure to aid the evolution of effective regulation which accommodates the innovation by FinTechs without compromising market integrity and within limits that ensure investor protection” The SEC added.

The SEC noted that companies that want to apply and participate in the Regulatory Incubation Program must demonstrate they meet the 5 eligibility criteria, which are: the innovation is for application in the Nigeria capital market; safe for investors. a genuine innovation that introduces a new product/process to serve specific investor needs; able to solve existing compliance or supervisory issues (optional) and ready for testing.