Examining Market Integrity and Capital Market Regulation in Nigeria

Abstract

Abstract

The integrity of the capital market is fundamental to investor confidence, efficient allocation of capital and sustainable economic development. In Nigeria, the capital market serves as an important mechanism for mobilising domestic and foreign investment, financing business expansion and supporting governmental and private-sector development initiatives. However, concerns relating to market manipulation, insider dealing, inadequate disclosure, corporate governance failures, fraudulent practices, weak enforcement and emerging risks associated with digital financial technologies continue to challenge the effectiveness and credibility of the market. This article examines the legal and institutional framework for maintaining market integrity and regulating the Nigerian capital market. It evaluates the roles of the Securities and Exchange Commission, the Nigerian Exchange Group and other relevant regulatory institutions in promoting transparency, fairness, investor protection and orderly market conduct. The study further examines the adequacy of existing regulatory mechanisms in addressing conventional and emerging forms of market abuse, including insider trading, price manipulation, misleading disclosure and technology-driven misconduct. Particular attention is given to the enforcement powers of regulators, regulatory compliance, corporate governance and the effectiveness of sanctions imposed for breaches of capital market rules. Adopting a doctrinal and analytical methodology, the article relies on relevant legislation, regulatory instruments, judicial decisions and scholarly literature. It argues that although Nigeria has developed a relatively comprehensive regulatory framework, significant gaps remain in enforcement capacity, regulatory coordination, technological surveillance, transparency and investor protection. The article therefore advocates stronger enforcement mechanisms, enhanced regulatory independence, improved market surveillance, greater disclosure obligations, technological innovation in supervision and more effective remedies for investors. These reforms are essential for strengthening market integrity, deepening investor confidence and positioning Nigeria’s capital market as a credible and competitive engine of economic development.