The Nigerian Securities and Exchange Commission (NSEC) has announced changes to the regulations governing virtual asset service providers (VASPs) in order to adapt to current circumstances. As part of these changes, the NSEC has introduced the Accelerated Regulatory Incubation Programme (ARIP) to facilitate the onboarding process for VASPs.
In a circular issued on June 21, the NSEC instructed all existing and potential VASPs to visit its e-portal and complete the application process within 30 days. Failure to comply with these instructions will result in enforcement action by the regulator.
The ARIP framework, consisting of 13 pages, aims to expedite the onboarding of entities that have submitted applications to the NSEC. This program enables applying entities to receive preliminary approval from the NSEC while waiting for the Digital Assets Rules to be implemented.
Furthermore, the ARIP offers VASPs valuable insights into the NSEC’s expectations before they officially commence operations.
According to the ARIP framework document, this program will also give the NSEC an opportunity to gain a deeper understanding of digital asset business models. This understanding will enable the NSEC to enhance its regulations and effectively address issues related to market integrity, investor protection, and money laundering.
Simultaneously, the NSEC has disclosed the penalties it will impose on non-compliant participants in the ARIP. For instance, VASPs that fail to comply will face a penalty of at least $3,370 (NGN 5,000,000) initially, with an additional penalty of approximately $134 for each day of non-compliance.
Unauthorized commercialized VASPs will be subject to a penalty of no less than $13,500, while brokers, market makers, and advisers operating without authorization will face a fine of at least $6,750.
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