Financial Crime World

Title: New AML/CFT/CPF Regulations in Nigeria: Strengthening the Capital Market against Financial Crimes

SEC’s New Measures to Enhance Capital Market’s Resilience

The Securities and Exchange Commission (SEC) in Nigeria has recently introduced new regulations, named the Securities and Exchange Commission (Capital Market Operators Anti-Money Laundering and Combating the Financing of Terrorism and Proliferation) Regulations, 2022, to fortify the capital market against financial crimes.

Objectives of the New Regulations

These new regulations aim to accomplish the following objectives:

  • Promote transparency
  • Minimize risks
  • Ensure compliance with local and international laws

Applying to all capital market operations, from business relationship establishment to daily transactions, these regulations are crucial in maintaining a crime-free financial environment.

Key Elements of the New Regulations

Institutional policy framework

  1. Adopt policies and procedures to combat ML/TF/CPF
  2. Appoint AML/CFT/CPF compliance officers
  3. Provide adequate resources to ensure their independence

Customer due diligence measures

  1. Identify clients
  2. Verify their identities
  3. Determine ownership structures

Ongoing due diligence

  1. Monitor clients’ transactions
  2. Update risk profiles
  3. Ensure sources of funds are legitimate

Enhanced due diligence

  1. Apply increased scrutiny to high-risk clients
  2. Assess PEPs and clients from high-risk jurisdictions

Record-keeping and reporting

  1. Maintain records
    • Transactions
    • STRs (Suspicious Transaction Reports)
  2. Submit regular reports to the NFIU (Nigerian Financial Intelligence Unit)

Correspondent relationships

  1. Adhere to international standards
  2. Conduct due diligence on foreign partners

Training and awareness

  1. Regular staff training sessions
  2. Keep up-to-date with FATF recommendations

The Significance of These Regulations

The new regulations mark a significant improvement in Nigeria’s capital market’s defenses against financial crimes. Operators must invest in resources and expertise to effectively implement these measures, ensuring Nigeria’s financial sector remains compliant and an active participant in the global fight against money laundering, terrorist financing, and proliferation financing.