SEC REGULATORY INCUBATION PROGRAM
for Specific Category of FinTech Entrepreneurs
The SEC Regulatory Incubation (RI) Program is designed to apply prescribed basic but limited regulation to supervise new Fintech business models and processes carrying out full or ancillary Capital Market activities. It is aimed at innovators who have been assessed and deemed eligible for SEC regulation, but for which no Rules exist or for which amendment of current Rules are required.
The RI guidelines thus, prescribes limited regulatory requirements that allow a set of potential market operators (Fintech Firms) to operate for a specified period.
Click to Download the RI Guidelines
Applications for Cohort 002/24 is closed
Regulatory Incubation (RI) Program as it relates to the Capital Market
The Regulatory Incubation (RI) program of the Commission is designed for promoters of new business models and processes that are currently carrying out full or ancillary Capital Market activities without the required authorization through the use of technology. The RI Program is an interim measure to aid the evolution of effective regulation without compromising market integrity and within limits that ensure investor protection. The Program will admit eligible business models and processes in batches for a period of one-year. The categories to be admitted will be determined by submissions received via an initial assessment form.
A. Who can Apply
- Registered Capital Market Operators
- Unregistered Fintech innovators that require regulation
- Firms of all sizes
- Special interest in firms that want to enhance investor participation in the Nigeria Capital Market
B. Eligibility Requirements for Application to participate in RI
If you want to apply to participate in the Regulatory Incubation Program, you must demonstrate that you meet our 5 eligibility criteria below:
Your innovation is:
- for application in the Nigeria Capital Market
- safe for investors
- a genuine innovation that introduces a new product/process to serve specific investor needs
- able to solves existing compliance or supervisory issues (optional)
- ready for testing
Please provide as much information as possible about how you meet these criteria when submitting your application.
C. Please Note: If your model is any of the following, we already have regulations for them and you should not apply for Regulatory Incubation:
- Crowdfunding
- Robo Advisory/Digital Investment Advisory
- Sub-broker Serving Multiple brokers using a digital platform
- Digital Fund/Portfolio Management
Please visit our Rules & Regulations portal for guidance on registration requirements.
Steps for Admission into the RI Program
The RI program operates by admitting identified Fintech business models and processes in cohorts for a one-year period. Participation in the RI program encompasses an Initial Assessment Phase and the Regulatory Incubation Phase. Applicants must first complete the initial assessment phase before approval is granted to proceed to the regulatory incubation phase. The categories to be admitted into each cohort is determined based on submissions received through the initial assessment form.
| Phase 1: Initial Assessment | |
| Activity | |
| Step 1 | Access and complete the RI Initial Assessment (RIA) Form |
| Step 2 | Receive response/acknowledgment of Submission: |
| 1. Where a framework exists for regulating the applicant’s innovation, guidance will be provided on the next steps; | |
| 2. Where the proposed innovation is eligible for further consideration, but no framework exists for its regulation, the applicant will be directed to fill and submit the Regulatory Incubation (RI) Application Form. | |
| Step 3 | Comply with steps provided in Step 2 above or complete and submit the RI application Form as applicable |
| Step 4 | Receive response on submitted RI application on one of the following: a) Whether or not admission has been granted to the RI Program and the Terms and Conditions of Admission; b) An indication of a future date when Applicant will be admitted to the Regulatory Incubation Program; c) Reasons for rejecting the innovation and the next steps to take where application is declined. |
| Phase 2: Regulatory Incubation Program | |
| Step 1 | File undertaking to abide by the terms, conditions and restrictions of admittance into the RI Program |
| Step 2 | Commence Regulatory Incubation Process |
| Step 3 | File quarterly report to the Commission Receive feedback from the RI Team on quarterly filings |
| Step 4 | Receive guidance on applicable regulatory regime and regulatory requirements within at 10 Months of successful operation |
| Step 5 | Exit from the program with clear directives on next steps to take at 12th Month |
| Step 6 | Commence registration process or terminate activity where RI process is not successful. |
Accessing and Completing the RI Initial Assessment Form (IAF)
If you are an individual, group or a business (registered or seeking to register with the Commission) that intends to launch an innovative product, process or platform in the SEC Regulatory Incubation Program, you are required to fill the Initial Assessment Form (via the link below) to enable the Commission provide guidance on the RI application process, the eligibility criteria and the information to be furnished to the Commission.
Note: Before you access the form, please have available and ready to provide the following:
- Fee of Fifty Thousand Naira (N50,000.00 ), only (paid online via the portal and Non-refundable)
- An end-to-end schematic diagram illustrating proposed business process (with explanatory notes)
- Certified copies of all incorporation documents
- Copy of any previous registration, regulatory license or authorization
Applications for Cohort 002/24 is closed
FREQUENTLY ASKED QUESTIONS ON SEC REGULATORY INCUBATION (RI) PROGRAM
Q1: What is the Objective of RI?
RI is designed to enable the Commission gain clearer understanding of new innovations in the Capital Market to ensure that it provides the necessary regulations that will both facilitate innovation and enhance investor protection and Market integrity. It entails the provision of basic requirements that allow potential operators (Fintech Firms) to operate under some prescribed but limited provisions for a specified period.
Q2: Who can apply for SEC Regulatory Incubation?
Any Company incorporated in Nigeria or licensed by a Securities Market Regulator in an equivalent jurisdiction offering or intending to offer innovative product, solutions or service or applying technology in an innovative way to provide investment and securities business in the Nigerian Capital Market.
Q3: Where should an application be submitted to?
All applications are completed and submitted online through the SEC website (www.sec.gov.ng/finport/). Access is granted based on pre-eligibility assessment.
Q4: Is there a specific period for RI Application?
There is a specific period for applications which will be announced periodically. However Interested applicants need to complete an initial assessment form to first ascertain eligibility prior to each announcement.
Q5: Would application to be in the Regulatory Incubation incur any administrative fee(s)?
Applicants are required to pay a filing fee of N50,000. at the submission of initial assessment form and N200,000. at the submission of the RI application.
Q7: What happens to an application assessed ineligible for Regulatory Incubation
Firms found not to be eligible for RI will be advised by the Commission on the next course of action.
Q8: Are unsuccessful applicants refunded?
Both Initial eligibility assessment and RI application fees are non-refundable.
Q9: How long is the Regulatory Incubation Process?
The RI process is for a period of one Year. However, this period may be extended if the Commission determines the need for it.
Q10: Can a FinTech Firm be asked to exit the RI before the expiration period?
A FinTech Firm may be asked to exit the RI if it is deemed ineligible to continue or when substantive rules are issued for regulation of the specific innovation
Q11: What happens if a Firm does not contact the Commission for eligibility assessment?
Firms operating illegally in the SEC Regulatory sphere without a SEC Registration or admittance into the RI process will face enforcement actions.
Q12: How long will an assessment of an RI application take?
The process of assessment and admittance into the RI program spans a period not exceeding 60-days.
Q13: Are FinTech Firms admitted into RI program recognised as SEC Registered Capital Market Operators (CMOs)?
Approval into SEC RI is NOT SEC Registration as a CMO. Successful Fintech Entrepreneurs at the end of the RI process are required to apply for a full SEC registration.
Q14. If I have made a submission already via the FinTech Assessment Form, do I need to make another submission to determine my eligibility for the RI program?
Yes. You will have to complete and submit a new FinTech Assessment form.
List of Firms Operating within RI
| S/N | Proposed Solution | Test Period | Institution Type | Contact Details | Remarks |
| 1. | NASD Digital Securities Exchange | 4th September, 2023 – 3rd September, 2024 | Existing Capital Market Operator | Address: NASD Plc, 9th Floor, UBA House, 57 Marina, Lagos Email: info@nasdng.com Phone Number: +2349024559698 Website www.nasdng.com Sponsor: Eguarekhide Longe | Cohort 001/23 Participant |
| 2. | Hashgreed Asset Tokenization Platform | 20th November, 2023 – 22nd November, 2024 | FinTech Entrepreneur | Address: VineKross Technologies Ltd, Horizon 2 Estate, B6 Unit 3, Meadow Hall Way, Lekki, Lagos, Nigeria Mobile: +234-812-844-7600 Email: support@hashgreed.com, Phone Number: 08128448600 Website: http://krosscoin.io Sponsor: Ighodaro Efosa Osamwonyi | Cohort 001/23 Participant |