SEC unveils roadmap for 2027 market-based valuation of fixed-income funds

The Securities and Exchange Commission (SEC) has set a September 2027 deadline for the full transition of Nigeria’s fixed-income market to market-based asset valuation, in line with the International Financial Reporting Standard (IFRS 9).

According to the SEC Director-General, Dr. Emomotimi Agama, the reform marks a major step toward ensuring fair value reporting, transparency, and restoring investor confidence in the capital market.

Speaking over the weekend, Agama said the transition framework was developed through extensive consultations with market operators to ensure a smooth and inclusive implementation.

A statement from the SEC on Sunday said all capital market operators are required to submit their implementation plans by October 2, 2025.

These submissions will help the Commission assess each operator’s preparedness and capacity ahead of the 2027 deadline.

“Requesting implementation plans is not just a bureaucratic exercise,” Dr. Agama explained.

“It’s to gauge readiness, identify challenges, and ensure that all operators are on the same path toward compliance.

“The idea is to achieve one purpose and one goal—market transparency.”

He noted that while equity funds in Nigeria are already valued at fair market prices, the new policy will align the fixed-income segment with global standards.

“Equity funds are already reported at fair value. What this reform addresses is the fixed-income funds space, ensuring it also meets international best practices,” he said.

Agama emphasized that adopting IFRS 9 would enable investors to assess asset values in real time and make Nigerian securities comparable with those in global markets. “Nigeria has come of age.

“We must operate according to global standards,” he stated. “Our goal is to create a market that is internationally competitive and transparent.”

Responding to concerns that market-based valuation could lead to short-term volatility, the SEC chief assured that the transition is designed to strengthen rather than destabilize the system.

“This reform is not intended to disadvantage investors but to promote transparency. Over time, as the market adjusts, volatility concerns will ease, and the entire system will become stronger and more credible,” he said.

Beyond the IFRS 9 reform, Agama disclosed that Nigeria is taking the lead in Africa in adopting the International Sustainability Standards Board (ISSB) framework, which focuses on climate-related and sustainability disclosures. He said the Commission is taking a gradual approach to implementation to avoid overburdening companies while ensuring compliance with emerging global norms.

“We pride ourselves as early adopters of the ISSB standards, but we’re also mindful of our local realities.

“The objective is not to shut companies out of capital markets but to attract investment through transparency and sustainability,” he added.

Looking ahead, Agama expressed optimism about the performance of Nigeria’s capital market in the final quarter of the year, citing ongoing government reforms and new legislative frameworks—such as the Nigerian Investment and Industry Regulatory Act (NIIRA) 2025 and the Investment and Securities Act (ISA) 2025—as catalysts for growth.

“Markets thrive on stability. With the macroeconomic reforms championed by President Bola Ahmed Tinubu, we expect significant growth and expansion.

“The NIIRA 2025 provides the foundation for sustainable progress,” he said.

The SEC boss reaffirmed the Commission’s commitment to transparency, investor protection, and the adoption of international standards that would attract foreign investment and enhance market credibility.

“We are on a path of progress and reform,” Agama concluded.

“The SEC’s ongoing initiatives—particularly the IFRS 9 transition and sustainability standards—are part of our broader agenda to globalize Nigeria’s capital market and position it as a benchmark for transparency and investor confidence.”