SEC Mandates Capital Market Freeze on ISIS-Linked Assets, Heightening AML/CFT Scrutiny
The Securities and Exchange Commission (SEC) has issued a stringent directive to all operators within Nigeria’s capital market, mandating the immediate identification and freezing of all funds, assets, and economic resources linked to a Nigerian national and three Nigerian companies. This action follows sanctions imposed by the United States Government, which alleges these entities facilitated financial transactions connected to the Islamic State of Iraq and Syria (ISIS) and ISIS-West Africa.
The directive, detailed in a circular titled ‘Notice of Sanction’ and published on the commission’s website, requires Capital Market Regulated Entities (CMREs) to freeze the assets of the designated individuals and companies without prior notification. These entities must then report their actions to the Secretariat of the Nigeria Sanctions Committee. The sanctioned individual is identified as Mukhtar Adamu Muhammad, also known by aliases Mukhtar Adamu and Muhammad Mukhtar. The implicated companies are Generation Currency Bureau De Change Limited, Manhattan Bureau De Change Limited, and Nine to Nine Exchange Bureau De Change Limited.
In its communication, the SEC explicitly instructs CMREs to “immediately, identify and freeze, without prior notice, all funds, assets, and any other economic resources belonging to the designated individual and entities in their possession.” Furthermore, operators are obligated to report all frozen assets, the specific actions taken in compliance with the designation, and any attempted transactions involving the sanctioned parties.
Beyond the immediate asset freeze, the SEC has directed capital market operators to promptly file suspicious transaction reports with the Nigerian Financial Intelligence Unit (NFIU). This is to facilitate further analysis of the financial activities associated with the designated individual and companies. The commission also mandates reporting to the NFIU all instances of name matching in financial transactions, irrespective of whether these occurred before or after the receipt of the sanctions list. CMREs are further instructed to prohibit any future dealings with the sanctioned individual and entities, and to maintain ongoing monitoring of related transactions, with findings to be reported to the Nigeria Sanctions Committee via [email protected].
This directive takes immediate effect, with the SEC underscoring that non-compliance constitutes a violation of the Investments and Securities Act, 2025, and the SEC Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Rules and Regulations. Penalties for non-compliance are severe, potentially including fines, suspension of operations, or revocation of registration. This move signals an intensified regulatory focus on fortifying Nigeria’s financial and capital market systems against terrorism financing and other illicit financial activities, a critical development for legal counsel, compliance officers, and corporate executives navigating the evolving regulatory landscape.
