Nigeria’s Securities and Exchange Commission (SEC) issued a compliance directive instructing all Capital Market Regulated Entities (CMREs) to terminate correspondent banking relationships and sever institutional business ties with North Korea (DPRK) and Iran.
The Securities and Exchange Commission (SEC) has directed all capital market regulated entities to immediately sever correspondent banking ties and restrict business dealings involving Iran and North Korea (DPRK).
The mandate was issued via an official SEC website circular, enforcing anti-money laundering guidelines updated during the Financial Action Task Force’s (FATF) February 2026 plenary session to mitigate global illicit finance risks.
The SEC noted that the directive was issued under the Investments and Securities Act, 2025, and existing AML/CFT regulations, requiring capital market entities to immediately step up restrictions and monitoring for transactions linked to high-risk jurisdictions.
Regarding North Korea, the SEC explicitly instructed all capital market entities to sever every financial link with any institutions connected to the DPRK.
The circular specifically instructed capital market firms to close all correspondent banking relationships with financial institutions incorporated in, owned by, or controlled by entities in North Korea.
The SEC explicitly directed capital market entities to terminate all correspondent banking relationships with financial institutions incorporated in, owned by, or controlled by North Korean interests.
The SEC instructed firms to prevent North Korean financial institutions from setting up or operating subsidiaries, branches, or representative offices, while restricting or refusing business transactions involving DPRK nationals, government bodies or their proxies.
The directive effectively cuts off formal banking and capital market channels connected to North Korean institutions within Nigeria’s regulated financial ecosystem.
Regarding Iran, the SEC directed capital market operators to refuse transaction processing for Iranian financial institutions and prohibited local firms from establishing branches or subsidiaries in the country.
The statement specified that operators must refuse transactions involving Iranian financial institutions and refrain from establishing or maintaining any of their branches or representative offices in Nigeria.
The SEC also prohibited Nigerian capital market firms from opening branches or subsidiaries in Iran, warning that gaps in the country’s anti-money laundering and counter-terrorist financing controls could compromise regulatory compliance.
The SEC also prohibited domestic capital market firms from opening branches or subsidiaries in Iran, citing weaknesses in the country’s AML/CFT/CPF standards that could jeopardize regulatory compliance.
Unlike the total prohibitions slapped on North Korea and Iran, the SEC directed firms to apply enhanced due diligence (EDD) to Myanmar, focusing on heightened scrutiny rather than an outright operational ban.
The circular listed 20 jurisdictions currently subject to increased FATF monitoring, including Algeria, Angola, Bulgaria, Bolivia, the Democratic Republic of the Congo, Haiti, Lao PDR, Lebanon,Cameroon, Nepal, South Sudan, Côte d’Ivoire, Kenya, Monaco, Namibia, Syria, Venezuela, Vietnam and the British Virgin Islands.
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The SEC further instructed all unregistered capital market entities to immediately sign up for the Nigeria Sanctions (NigSac) Alerts system to ensure real-time compliance with national and UN security designations.
The SEC emphasized that mandatory subscription ensures prompt access to lists of designated terror- and proliferation-financing targets, enabling firms to enforce Targeted Financial Sanctions without delay.
The SEC emphasized that any unusual or suspicious transactions must be reported immediately to the Nigerian Financial Intelligence Unit (NFIU).
The SEC warned that the circular takes immediate effect, noting that non-compliance violates the Investments and Securities Act, 2025, and AML/CFT regulations, carrying penalties such as heavy fines, operational suspensions or licence revocations.
