SEC Directs Capital Market Operators to Terminate Business, Banking Ties with Iran, North Korea
• Monitors Lebanon, Monaco, Others Kayode Tokede The Securities and Exchange Commission (SEC) has directed all capital market regulated entities to terminate correspondent banking relationships and restrict business dealings involving
The Securities and Exchange Commission (SEC) has instructed capital market regulated entities in Nigeria to discontinue their business and banking relationships with Iran and North Korea. This directive, issued on August 14, 2026, follows updated recommendations from the Financial Action Task Force (FATF) regarding jurisdictions posing significant risks related to money laundering, terrorist financing, and proliferation financing.
The SEC, implementing the Investments and Securities Act of 2025 and its AML/CFT Rules and Regulations, made the directive mandatory for all capital market regulated entities (CMREs).
For North Korea, the SEC mandated CMREs to sever financial ties with any institution linked to the country, terminating all correspondent banking relationships and preventing any subsidiaries, branches, or representative offices in Nigeria. The directive also instructed firms to refuse transactions involving North Korean nationals, entities, or government bodies.
Similarly, for Iran, the SEC directed CMREs to refuse transactions with Iranian financial institutions, decline to establish or maintain subsidiaries, branches, or representative offices in Nigeria, and refrain from operating in Iran due to potential compliance risks. Although Myanmar did not face an outright restriction, the SEC required enhanced due diligence measures for businesses and transactions related to the country.
Additionally, the SEC directed all firms to subscribe to Nigeria’s Sanctions (NigSac) Alerts system immediately to receive timely updates on terrorist financing and proliferation financing designations. Operators are required to report any unusual or suspicious transactions to the Nigerian Financial Intelligence Unit (NFIU) and any actions taken in compliance with designations to the Secretariat of the Nigeria Sanctions Committee.
Failure to comply with these directives is considered a violation of the Investments and Securities Act of 2025 and the SEC AML/CFT Rules and Regulations, subjecting violators to regulatory sanctions, including fines, suspension of operations, or revocation of registration.
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