SEC orders Nigerian capital market firms to cut all ties with North Korea, Iran
By Aboki Forex —
The Securities and Exchange Commission (SEC) has ordered all capital market regulated entities in Nigeria to terminate correspondent banking relationships and restrict business dealings involving North Korea and Iran. The directive takes immediate effect as part of sweeping anti-money laundering and counter-terrorism financing measures.
The circular was released on August 14 but dated June 19, 2026. It implements updated statements issued by the Financial Action Task Force (FATF) during its February 2026 plenary session, which identified jurisdictions posing significant risks related to money laundering, terrorist financing, and proliferation financing.
What the SEC ordered
The SEC said the directive was issued pursuant to the Investments and Securities Act, 2025, and the SEC AML/CFT Rules and Regulations. All capital market regulated entities (CMREs) must immediately implement enhanced restrictions and monitoring measures for transactions linked to designated high-risk jurisdictions.
For the Democratic People’s Republic of Korea (DPRK), the Commission directed all CMREs to completely sever financial relationships with DPRK-linked institutions. The circular instructed firms to terminate all correspondent banking relationships with financial institutions incorporated in, owned, or controlled by persons or entities in North Korea.
For Iran, the SEC ordered capital market firms to refuse transactions involving Iranian financial institutions. The Commission also directed firms to refrain from establishing or operating branches, subsidiaries, or representative offices in Iran where deficiencies in the country’s anti-money laundering, counter-terrorism financing, and counter-proliferation financing framework may compromise compliance obligations.
Myanmar and enhanced monitoring
Myanmar was treated differently. Rather than imposing an outright restriction, the SEC ordered firms to apply enhanced due diligence measures for Myanmar-related business.
The SEC also directed Nigerian capital market operators to strengthen compliance controls for transactions involving jurisdictions placed under increased monitoring by the FATF. The affected jurisdictions include Algeria, Angola, Bolivia, the British Virgin Islands, Bulgaria, Cameroon, Côte d’Ivoire, the Democratic Republic of the Congo, Haiti, Kenya, Lao PDR, Lebanon, Monaco, Namibia, Nepal, South Sudan, Syria, Venezuela, Vietnam, and Yemen.
The FATF places jurisdictions under increased monitoring when they have committed to addressing strategic deficiencies in their anti-money laundering and counter-terrorism financing frameworks but remain subject to enhanced international scrutiny.
Compliance and consequences
The Commission warned that any unusual or suspicious transactions must be promptly reported to the Nigerian Financial Intelligence Unit (NFIU). It added that the circular takes immediate effect and that failure to comply would constitute a violation of the Investments and Securities Act, 2025, and the SEC AML/CFT Rules and Regulations. Sanctions include fines, suspension of operations, or revocation of registration.
The latest directive comes amid Nigeria’s broader effort to strengthen its anti-money laundering and counter-terrorism financing framework. Recent sanctions designations by the Nigeria Sanctions Committee identified individuals and Bureau de Change operators accused of facilitating terrorist financing linked to the Islamic State West Africa Province (ISWAP). The designations were later echoed by the U.S. Treasury, which sanctioned several Nigerian BDC operators and individuals for alleged ISIS-related financial facilitation.
For Nigerian businesses, the circular means tighter compliance obligations for capital market operators and higher scrutiny of cross-border transactions. Firms that deal with entities linked to North Korea, Iran, or the 20 monitored jurisdictions must now prove they have adequate controls or face regulatory sanctions.