The Association of Securities Dealing Houses of Nigeria (ASHON) has raised concerns over the revocation of the operating licence of Universal Insurance Plc by the National Insurance Commission (NAICOM), warning that the timing and manner of the regulatory action could undermine investor confidence and raise broader questions about market integrity.
ASHON, the umbrella body of securities dealing houses registered with the Securities and Exchange Commission (SEC), called for an urgent review of the circumstances surrounding the revocation and urged the Federal Ministry of Finance and the SEC to establish a coordinated regulatory framework for listed companies facing capital adequacy, solvency or licensing challenges.
The association’s concerns centre on the timing of the licence cancellation, which became effective on August 14, 2026, the same day Universal Insurance disclosed to the Nigerian Exchange (NGX) that it had entered into a binding investment agreement with FPNG Co-Nvest Limited for an equity investment of approximately N7.128bn.
Under the proposed transaction, FPNG Co-Nvest was expected to acquire a 50.1 per cent majority stake in Universal Insurance through a private placement, subject to the completion of the transaction and the necessary regulatory approvals.
Universal Insurance had stated that its board and shareholders had approved the transaction and that it was engaging NAICOM and other relevant regulators to complete the recapitalisation process.
However, NAICOM’s decision to cancel the company’s registration took effect on the same date, following a notice dated August 13, 2026.
A receiver/provisional liquidator was subsequently appointed.
ASHON said the close timing of the two developments raises significant questions about regulatory coordination, disclosure and the protection of investors in publicly quoted companies.
The association said it was particularly concerned about the possibility that investors could have traded in Universal Insurance shares without timely knowledge that a regulatory decision capable of fundamentally affecting the company’s existence and the value or tradability of its securities had already been taken.
According to ASHON, a listed company is not merely a private entity subject to the authority of its sector regulator, but also part of a wider capital-market infrastructure involving the NGX, SEC, Central Securities Clearing System (CSCS), stockbroking firms and thousands of investors.
It therefore argued that any regulatory decision capable of materially affecting the status, solvency, ownership or continued existence of a listed company should be communicated through appropriate capital-market channels in a timely and coordinated manner.
ASHON stressed that it supports strong, independent and effective regulation, including regulatory intervention where a financial institution poses risks to policyholders, investors or the wider financial system.
However, the association said regulatory action should also be guided by public-interest considerations, including investor protection, preservation of economic value, transparency and the stability of the financial system.
It argued that recapitalisation should be treated primarily as a corrective mechanism for strengthening a financially challenged institution rather than as a punitive measure.
Where credible investors are willing and able to provide fresh capital, ASHON said regulators should, within the law, give such a transaction a reasonable opportunity to address the institution’s capital deficiency before resorting to irreversible measures such as licence cancellation and liquidation.
The association said regulators should, among other issues, establish whether proposed fresh capital is available, whether its source is acceptable, whether the transaction has received the necessary corporate approvals, whether the funds meet applicable regulatory thresholds and whether the recapitalisation can restore the institution to financial soundness.
It also urged regulators to consider whether policyholders, shareholders, investors and other stakeholders would be better protected through an orderly resolution process.
ASHON said the Universal Insurance case highlights the need for a permanent regulatory coordination mechanism covering listed companies whose licences, capital adequacy, solvency or continued existence are under threat.
The association called for a mandatory protocol involving the SEC, NAICOM, NGX, the Corporate Affairs Commission (CAC), the Central Bank of Nigeria (CBN) and other relevant regulators.
Under the proposed framework, ASHON said sector-specific regulators should, except in genuine emergencies involving issues such as systemic risk, fraud, dissipation of assets or evidence preservation, notify the SEC and NGX before taking final action against a listed entity.
It said such coordination would allow the capital-market authorities to assess the implications for investors, trading, market disclosure and settlement while ensuring that regulatory enforcement is not compromised.
ASHON also urged regulators to adopt a graduated approach to distressed listed companies where circumstances permit.
Possible measures, according to the association, could include enhanced regulatory supervision, formal capital-restoration plans, time-bound recapitalisation windows, restrictions on dividends and new business, appointment of independent advisers or special supervisors, controlled changes in ownership, mergers and acquisitions, bridge financing and other statutory resolution mechanisms.
The association said licence cancellation should remain available where necessary, but argued that it should follow a transparent resolution process rather than become the first visible manifestation of regulatory intervention.
“Regulation must ultimately serve the public interest,” ASHON said, stressing that the effectiveness of a regulator should not be measured only by its ability to impose sanctions but also by its capacity to protect investors, preserve value and strengthen the financial system.
The association said the issue was particularly important because Nigeria’s capital market has been working to rebuild investor confidence following years of market volatility, corporate failures, governance concerns and losses suffered by investors.
It warned that investors who purchase shares of listed companies through regulated stockbroking firms should not subsequently discover that a regulatory action had already been taken that fundamentally changed the status and value of their investments without adequate market communication.
According to ASHON, the ordinary investor does not distinguish between the various financial regulators when assessing the integrity of the financial system.
“To the ordinary investor, the Nigerian financial system is one ecosystem,” the association said, warning that losses arising from regulatory fragmentation could therefore be perceived as a broader failure of the financial system.
ASHON further noted that its members were themselves operating under increased regulatory and capital requirements designed to strengthen the resilience of the capital market.
The association said stockbroking firms could not be expected to encourage greater participation in the equities market while investors remained exposed to uncertainty arising from uncoordinated regulatory decisions affecting listed companies.
It argued that regulatory certainty was essential for attracting domestic savings and foreign portfolio investment, lowering the risk premium attached to Nigerian equities and reducing the cost of capital for businesses.
The association also highlighted the wider economic importance of the capital market, noting that it mobilises savings, channels funds into productive activities, provides alternatives to bank financing, supports ownership diversification and promotes corporate governance through disclosure and shareholder scrutiny.
ASHON warned that if investors began to believe that regulatory decisions could unexpectedly wipe out the value or tradability of listed securities, they could demand higher returns, reduce their exposure to equities or move funds into fixed-income instruments, foreign assets or other markets.
The association also drew lessons from Nigeria’s recent banking recapitalisation exercise, which demonstrated the ability of the capital market to mobilise substantial fresh capital for financial institutions.
ASHON noted that the SEC had previously highlighted the capital market’s role in mobilising and absorbing approximately N4.65 trillion during the banking recapitalisation exercise.