About Us
Global Advisory Experts Logo
Global Advisory Experts Logo

Find a Global Law Expert

Practice Area


Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.


posted 2 years ago


In April 2021, the Nigerian Securities and Exchange Commission (“SEC”) issued a directive prohibiting unregistered Financial Technology (“Fintech”) companies from offering, selling or dealing in foreign listed securities[1]. This directive raised concerns that SEC might be stifling the development of innovation in Nigeria.

Recently, SEC has taken some positive steps that should address these concerns. One of which is the issuance of the first digital stock trading licence to Chaka Technologies Limited; another is the establishment of a Regulatory Incubation Program (“RI Program”) aimed at encouraging innovation by Fintechs within limits that ensure investor protection.

In this article, we examine the scope of the RI program, eligibility requirements for Fintechs and the stages of the RI Program.

What is the RI Program?

The RI Program is a program established by SEC to enable Fintech innovators (whose activities may or may not be subject to existing regulations) to carry out capital market activities for a limited period of time without prior registration with SEC. It is the SEC’s version of a sandbox.

The RI Program creates an avenue for SEC to guide Fintech innovators on regulatory approvals to be obtained upon completion of the RI Program.

What is the duration of the RI Program?

The RI Program will be launched in the third quarter of 2021 and will admit eligible Fintech businesses in cohorts for a period of 1 (one) year. The commencement date for each cohort would be communicated by SEC  to the entities belonging to that cohort, prior to the take-off date of the RI  Program.

Who is eligible to participate in the RI Program?

To be eligible to participate in the RI Program, applicants are required to satisfy certain conditions which include:

  1. using innovative technology to offer a new type of product or service, or applying innovation to an existing financial product or service;
  2. readiness to take off with live customers and operate within the purview of the SEC regulatory framework;
  3. offering a product or service that addresses a problem (compliance or supervision) or brings potential benefits to its consumers or the Nigerian capital market;
  4. ensuring that the product is safe for investors; and
  5. capacity to onboard a maximum of 100 clients. Where the entity is already in existence, it is to maintain its existing clients and not onboard new ones during the program.

What are the stages of the RI Program?

Participation in the RI Program involves the 2 (two) broad stages highlighted below.

  1. The Initial Assessment Phase

At this stage, the applicant is required to fill and submit a Fintech Initial Assessment form. Upon submission, SEC would carry out an assessment of the proposed product or service to determine whether it falls under the purview of an existing regulatory framework. Where a framework exists which regulates the product or service, SEC provides guidance to the applicant on steps to be taken to comply with the regulatory framework. On the other hand, where there is no regulatory framework for the product or service, but the product or service is regarded as eligible for further consideration by SEC, the applicant would be directed to fill and submit the Regulatory Incubation form in order to move to the Regulatory Incubation phase.

  1. The Regulatory Incubation Phase

This stage commences with the issuance of a letter admitting an applicant to the RI Program. During the period of the program, the entity would receive quarterly feedback from the RI team on its product or service. By the 10th (tenth) month, SEC would provide the entity with guidance on regulatory requirements applicable to its product or service. Upon the completion of the RI Program, the entity is required to fully commence operations as an entity registered with SEC using the guidance provided during the RI Program; or to terminate its activities where the registration requirements issued by SEC for the relevant product or service are not complied with.


The recent actions of the Central Bank of Nigeria (“CBN”) in establishing the Regulatory Sandbox Operations Framework[2]  and SEC in introducing the RI Program, shows a willingness by the apex regulators of the financial sector in Nigeria to encourage Fintech innovation. The effectiveness of these programs would, however, largely depend on how well they are implemented by these regulators.

[1] https://pavestoneslegal.com/trading-of-foreign-listed-securities-in-nigeria-regulatory-update/

[2] Click on https://pavestoneslegal.com/the-central-bank-of-nigerias-regulatory-sandbox-operations-framework/ to read our article on CBN”s Regulatory Sandbox Operations Framework.


who are already getting the benefits

Sign up for the latest advisory briefings and news within Global Advisory Experts’ community, as well as a whole host of features, editorial and conference updates direct to your email inbox.

Naturally you can unsubscribe at any time.

Newsletter Sign Up

About Us

Global Advisory Experts is dedicated to providing exceptional advisory services to clients around the world. With a vast network of highly skilled and experienced advisers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.

Contact Us

Stay Informed

Join Mailing List