SEC Directs Capital Market Operators to Terminate Business, Banking Ties with Iran, North Korea

Nigeria's Securities and Exchange Commission (SEC) has issued a directive to all regulated entities within the capital market, mandating the termination of correspondent banking relationships and the restriction of business dealings with the Democratic People’s Republic of Korea (DPRK) and Iran. This move aligns with updated statements from the Financial Action Task Force (FATF).

The FATF, during its February 2026 plenary session, identified both North Korea and Iran as jurisdictions posing significant risks related to money laundering, terrorist financing, and proliferation financing. In response, the SEC's circular, dated August 14, 2026, invokes the Investments and Securities Act, 2025, and the SEC AML/CFT Rules and Regulations to enforce enhanced restrictions and monitoring measures for transactions connected to these high-risk nations.

“

Terminate all correspondent banking relationships with financial institutions incorporated in, owned or controlled by persons or entities in the DPRK.

Specifically for the DPRK, capital market regulated entities (CMREs) are instructed to sever all financial ties, including terminating correspondent banking relationships with North Korean financial institutions. They are also prohibited from establishing or maintaining subsidiaries, branches, or representative offices of DPRK financial institutions and must restrict or refuse business relationships and transactions involving North Korean nationals, entities, government bodies, or their representatives. This effectively cuts off formal banking and capital market channels linked to North Korean institutions within Nigeria's regulated market.

For Iran, the SEC directs capital market firms to refuse transactions involving Iranian financial institutions and to decline establishing or maintaining subsidiaries, branches, or representative offices of such institutions in Nigeria. Furthermore, firms are advised to refrain from establishing or operating branches, subsidiaries, or representative offices in Iran if deficiencies in the country's anti-money laundering, counter-terrorism financing, and counter-proliferation financing framework could jeopardize compliance obligations. Myanmar was subject to different treatment, with the SEC imposing restrictions rather than an outright ban.

“

Refuse to process or facilitate transactions with Iranian financial institutions and decline to establish or maintain subsidiaries, branches or representative offices of such institutions in Nigeria.