SEC Orders Capital Market Operators to Subscribe to NigSac Alerts, Freeze Terrorism-Linked Funds
The Securities and Exchange Commission (SEC) has directed all capital market-regulated entities (CMREs) to immediately subscribe to Nigeria’s Sanctions (NigSac) Alerts system as part of intensified efforts to combat terrorism financing and money laundering.
The directive follows the designation of individuals and Bureau de Change (BDC) operators by Nigerian and international authorities over alleged involvement in terrorism financing and providing material support to the Islamic State West Africa Province (ISWAP).
Through three circulars issued to market operators, the SEC made subscription to the NigSac Alerts system a mandatory compliance requirement. Entities that fail to comply could face regulatory sanctions, including fines, suspension of operations or revocation of their registration.
The move is also linked to Nigeria’s implementation of Financial Action Task Force (FATF) requirements concerning high-risk jurisdictions and signals a further tightening of the country’s anti-money laundering and counter-terrorism financing framework.
SEC orders immediate freezing of assets
In one of the circulars, the SEC said the Nigeria Sanctions Committee (NSC), acting under the Terrorism Prevention and Prohibition Act, 2022, had designated six individuals and three entities as terrorist financiers and added them to the Nigeria Sanctions List.
The commission directed all regulated capital market entities to immediately:
Identify and freeze, without prior notice, all funds, assets and economic resources belonging to designated individuals and entities.
Report frozen assets and other actions taken to the NSC Secretariat.
Report attempted transactions involving designated persons or entities.
File suspicious transaction reports with the Nigerian Financial Intelligence Unit (NFIU).
Report name matches found in financial transactions, whether they occurred before or after the sanctions list was received.
Prohibit further dealings with designated individuals and entities.
Continue monitoring transactions linked to the designated persons and report any findings to the NSC.
The SEC also warned that unusual or suspicious transactions must be promptly reported to the NFIU.
The directives take immediate effect, with non-compliance constituting a violation of the Investments and Securities Act, 2025, as well as the SEC’s AML/CFT rules and regulations.
Increased monitoring of high-risk jurisdictions
The SEC also directed market operators to strengthen monitoring of relationships involving jurisdictions currently under increased monitoring by the FATF.
The measures include refusing transactions involving Iranian financial institutions, applying enhanced due diligence to Myanmar-linked businesses and maintaining heightened monitoring of relationships connected to jurisdictions under FATF increased monitoring.
Operators are also required to pay particular attention to entities and individuals designated as terrorism financiers.
The directive requires firms to ensure that their compliance systems can receive NigSac alerts and automatically flag transactions involving sanctioned persons or entities.
BDCs linked to terrorism financing
The latest measures follow a series of terrorism-financing designations involving Bureau de Change operators and informal financial networks.
Among those designated by Nigerian authorities in June were Babangida Muhammed Adamu Hammajam, Abdullahi Umar Usman, Ibrahim Abubakar, Adamu Chiroma, Muktar Muhammad Adamu and Yakubu Ogirima Ibrahim.
The authorities alleged that the individuals were involved in financing activities linked to ISWAP, including the movement of funds through BDC operations and support for terrorist cells.
Three BDC companies — Nine to Nine BDC Ltd, Generation Currency BDC Ltd and Abbal Bako & Sons Bureau de Change — were also designated over alleged involvement in terrorism-financing networks.
The US Treasury Department subsequently announced sanctions against several Nigerian individuals and BDC entities over alleged ISIS-related financial activities.
The series of designations has increased scrutiny of informal financial channels that authorities believe can be exploited to move illicit funds.
Stronger compliance obligations for market operators
Although capital market operators are not directly involved in BDC activities, the SEC’s directive means they must now treat NigSac alerts as a key source of compliance intelligence.
Fund managers, brokers, investment firms and other regulated entities are expected to strengthen their customer due diligence, beneficial ownership checks and transaction-monitoring systems.
They must also ensure that their watchlists reflect relevant Nigerian and international sanctions designations.
The NigSac Alerts system is designed to provide timely information on terrorism-financing and proliferation-financing designations and support the implementation of targeted financial sanctions.
The SEC’s latest directive therefore places greater responsibility on capital market operators to identify suspicious financial flows early, freeze assets where required and promptly report potential violations to the relevant authorities.
