Nigeria’s Securities and Exchange Commission has instructed capital-market participants to halt or restrict dealings with financial institutions linked to North Korea, Iran and Myanmar, citing money-laundering, terrorism-financing and proliferation-financing risks identified by the Financial Action Task Force.
Key takeaways
- The directive applies to listed companies and other Capital Market Regulated Entities.
- Firms must end correspondent banking ties with North Korean institutions and block or limit related transactions.
- Transactions involving Iranian financial institutions must not be processed or facilitated.
- Myanmar-linked customers, transactions and relationships will face intensified due-diligence and monitoring requirements.
- The SEC also highlighted 20 jurisdictions subject to the FATF’s increased-monitoring process.
SEC sets restrictions under 2025 investment law
The regulator issued the instruction in a Friday circular addressed to listed entities and other Capital Market Regulated Entities, or CMREs. It said the measures were consistent with FATF actions concerning countries that present substantial exposure to illicit-finance risks, including money laundering, terrorist financing and the financing of weapons proliferation. The requirements are being applied under Nigeria’s Investments and Securities Act 2025.
For North Korea, CMREs must close correspondent-banking arrangements with financial institutions incorporated in the country or owned or controlled by North Korean individuals or entities. They must also ensure that subsidiaries, branches and representative offices of North Korean financial institutions are neither opened nor kept within their operations.
The SEC further ordered firms to limit, or reject where necessary, business relationships and transactions involving North Korean nationals, companies, government agencies or individuals acting for them.
In relation to Iran, operators are required to reject any request to handle or support transactions involving Iranian financial institutions. They must also decline to establish or retain subsidiaries, branches or representative offices of those institutions in Nigeria.
The commission additionally told CMREs not to establish or run branches, subsidiaries or representative offices in Iran if weaknesses in the country’s anti-money-laundering, counter-terrorist-financing and counter-proliferation-financing framework could undermine their compliance responsibilities.
For Myanmar, the required response is enhanced due diligence calibrated to the risks associated with the country. That includes conducting transaction surveillance more frequently and with broader coverage and greater intensity for customers, transactions and commercial relationships connected to Myanmar.
FATF watchlist and Nigerian market impact
The SEC also reminded capital-market operators that the FATF’s jurisdictions under increased monitoring are Algeria, Angola, Bolivia, the British Virgin Islands, Bulgaria, Cameroon, Côte d’Ivoire, the Democratic Republic of the Congo, Haiti, Kenya, Lao PDR, Lebanon, Monaco, Namibia, Nepal, South Sudan, Syria, Venezuela, Vietnam and Yemen.
Separately, investors on the Nigerian Exchange Limited reportedly suffered a N3.8 trillion decline after the management of NGX Group visited President Bola Ahmed Tinubu.
