Which institution is responsible for the regulation and supervision of capital markets in Nigeria?

1. Analyze the question The question asks which body regulates and supervises the capital market. The key words are "regulation" and "supervision", which point to a regulator, not a marketplace.

2. Explain the concept The capital market is where long-term securities such as shares, bonds and stocks are issued and traded. Two roles exist:

• Operator or platform: provides the marketplace where trading happens.
• Regulator: makes the rules, licenses operators, protects investors and supervises everyone in the market.

3. Go through the options

• A. Nigerian Stock Exchange (NSE): This is the trading platform, now called the Nigerian Exchange Group (NGX). It is a self-regulatory organisation that runs the market, but it is regulated by the SEC. So it is not the apex regulator.
• B. Securities and Exchange Commission (SEC): This is the apex regulator of the Nigerian capital market. It was established under the Investments and Securities Act (ISA). It registers securities, licenses market operators such as stockbrokers and issuing houses, and protects investors. ✅
• C. Financial Reporting Council of Nigeria (FRCN): It regulates accounting, auditing and financial reporting standards, not the capital market itself.
• D. Corporate Affairs Commission (CAC): It registers and regulates companies (incorporation), not the capital market.

4. Answer The correct option is B. Securities and Exchange Commission (SEC).

5. Exam tip Remember the difference: NSE/NGX = the market, SEC = the referee. If a question says "regulate" or "supervise" the capital market, think SEC. Likewise, CAC means company registration, and FRCN means financial reporting standards.