Nigeria’s Securities and Exchange Commission, SEC, has proposed new rules governing public offerings of securities by Free Trade Zone Entities, FTZEs. The Commission said the framework is designed to strengthen investor protection and ensure orderly participation of free zone companies in the capital market.
Under the proposed rules issued pursuant to Section 95(1)(f) of the Investments and Securities Act 2025, the SEC has set a minimum capital requirement of 7.5 billion naira for any Free Trade Zone Entity seeking to make a public offering. The Commission also stated that no shares of an FTZE can be offered or issued to the public without its prior approval.
SEC further explained that registration requirements for such offerings must include verified details of the issuer’s minimum paid-up capital, shareholder structure, and holdings, certified by the relevant Free Zone Authority or an authorised custodian. It also requires information on the company’s board composition, a no-objection letter from the Free Zone Authority, and mandatory disclosure for listing on a registered securities exchange.
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In addition, a Free Trade Zone Entity must be duly licensed by a Free Zone Authority, have at least three years of operational track record with a minimum of two years in independent activity within a free trade zone, and maintain senior management with adequate competence and experience relevant to its operations. The Commission said the measures are aimed at improving transparency, accountability, and investor confidence in the segment.
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