Nigeria’s Securities and Exchange Commission, SEC, has directed the immediate freezing of assets belonging to 13 capital market entities suspected of links to terrorism financing.

The action follows the designation of 10 individuals and three organizations on the Nigeria Sanctions List by the Nigeria Sanctions Committee. In a directive titled “Commission’s Sweeping Compliance Directive Issued to Capital Market Operators,” the SEC said the decision aligns with provisions of the Terrorism (Prevention and Prohibition) Act, 2022.

According to the Commission, the law mandates the freezing of all funds, assets, and economic resources associated with designated persons and entities without prior notice.

The SEC disclosed that capital market operators and stakeholders have been formally notified of the development, noting that the Nigeria Sanctions Committee approved the inclusion of the affected individuals and entities for sanctions, including asset freezes, travel bans, and arms embargoes.

Operators have been instructed to immediately identify and freeze all accounts linked to those listed, halt any ongoing or future transactions, and report both frozen assets and attempted dealings to the Sanctions Committee Secretariat.

Further details revealed that several of the individuals had previously been convicted by the Abu Dhabi Federal Court of Appeal in April 2019 for financing terrorism tied to Boko Haram. The convictions stemmed from allegations of raising funds in Dubai and transferring them to Nigeria to support terrorist activities, with penalties ranging from 10-year jail terms to life imprisonment.

The SEC noted that the case underscores how corporate entities can be used as channels for illicit financial flows, stressing the need for tighter scrutiny across the financial system.

It added that the asset freeze measure is preventive, aimed at disrupting funding networks for terrorism before resources can be deployed.

The Commission warned that failure to comply with the directive could attract severe consequences, including civil and criminal penalties, as well as reputational risks for affected institutions.

The directive also extends to Designated Non-Financial Businesses and Professions (DNFBPs), reflecting a broader enforcement strategy across Nigeria’s financial ecosystem.

Reaffirming its zero-tolerance stance on anti-money laundering and counter-terrorism financing violations, the SEC urged market operators to strengthen real-time monitoring systems, ensure effective name screening, and act swiftly without prior notice to affected clients.

It cautioned that non-compliance could undermine the credibility of firms both locally and internationally.

“This highlights a pattern where corporate vehicles are used as channels for financial flows, reinforcing the need for heightened scrutiny of business entities within the financial system.

“The SEC also emphasized that the asset-freezing mechanism is preventive rather than punitive, designed to disrupt financial support systems for terrorism before funds can be deployed.

“The implications for non-compliance are severe, including both civil and criminal liabilities, as well as reputational damage for institutions found wanting.

“For market operators, the trading systems must be capable of rapid name screening, asset tracing, and reporting, while compliance teams are expected to act without delay or prior notice to affected clients,” SEC stated.