Free Practice Questions for SEC Nigeria Sponsored Individual

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Sample SEC Nigeria Sponsored Individual Practice Questions

Try these sample questions to review concepts for the SEC Nigeria Sponsored Individual exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which authority acts as the apex regulatory body for the Nigerian capital market?

A.Securities and Exchange Commission (SEC) Nigeria

B.Central Bank of Nigeria (CBN)

C.Nigerian Exchange Group (NGX)

D.Nigerian Deposit Insurance Corporation (NDIC)

Explanation: The Securities and Exchange Commission (SEC) is the apex regulatory body for the Nigerian capital market, established to regulate and develop the market. While CBN regulates banks, NGX is an exchange, and NDIC protects depositors.

2Which demutualized platform serves as the principal securities exchange for trading equities and corporate bonds in Nigeria?

A.Nigerian Exchange Group (NGX)

B.FMDQ Securities Exchange

C.NASD OTC Securities Exchange

D.Lagos Commodities and Futures Exchange (LCFE)

Explanation: The Nigerian Exchange Group (NGX), formerly the Nigerian Stock Exchange (NSE), is the primary exchange for trading equities and corporate bonds in Nigeria following its demutualization. FMDQ and NASD cater to debt/derivatives and OTC markets respectively.

3Which entity is responsible for clearing, depository, and settlement of transactions executed on the Nigerian Exchange (NGX)?

A.Central Securities Clearing System (CSCS) Plc

B.Securities and Exchange Commission (SEC)

C.Central Bank of Nigeria (CBN)

D.Nigerian Capital Market Institute (NCMI)

Explanation: The Central Securities Clearing System (CSCS) Plc acts as the central securities depository (CSD), clearing house, and settlement agent for transaction matches executed on securities exchanges in Nigeria. The SEC is the regulator; the CBN handles cash settlement banks.

4What is the standard transaction settlement cycle (T+N) for equity trades executed on the Nigerian Exchange (NGX)?

A.T+2 (Transaction day plus two business days)

B.T+1 (Transaction day plus one business day)

C.T+3 (Transaction day plus three business days)

D.T+5 (Transaction day plus five business days)

Explanation: Effective 1 June 2026, the Nigerian Exchange (NGX) migrated to a T+1 settlement cycle, meaning ownership transfer and cash settlement occur one business day after the trade execution day. Nigeria moved from T+3 to T+2 in November 2025, then to T+1, becoming one of the first African markets to adopt T+1.

5What is the process of converting physical share certificates into an electronic format stored in the CSCS system called?

A.Dematerialization

B.Immobilization

C.Rematerialization

D.Re-registration

Explanation: Dematerialization is the process by which paper share certificates are converted and registered in electronic form under the client's account in the CSCS. This eliminates physical handling risk and speeds up settlement.

6Which exchange in Nigeria specializes in debt capital markets, foreign exchange, and over-the-counter (OTC) derivatives?

A.FMDQ Securities Exchange

B.Nigerian Exchange Group (NGX)

C.NASD OTC Securities Exchange

D.AFEX Commodities Exchange

Explanation: FMDQ Securities Exchange (formerly FMDQ OTC PLC) is licensed by the SEC to organize and regulate debt, foreign exchange, treasury, and OTC derivatives markets in Nigeria. NGX is the primary equity exchange, and NASD is for unlisted securities.

7Where are the shares of public companies that are NOT listed on the Main Board of the NGX traded in Nigeria?

A.NASD OTC Securities Exchange

B.FMDQ Securities Exchange

C.Primary Market IPOs only

D.Bilateral off-market transfers only

Explanation: The NASD OTC Securities Exchange is the SEC-licensed platform dedicated to trading unlisted securities of public companies in Nigeria. It provides liquidity and transparent pricing for public companies that do not meet NGX listing requirements.

8What is the primary distinguishing feature of the primary market compared to the secondary market?

A.The issuer receives the cash proceeds from the sale of securities directly

B.Transactions are executed through stockbrokers on the exchange floor

C.Shares are traded only between existing investors

D.Prices are determined entirely by continuous matching of buy and sell orders

Explanation: In the primary market, new securities are created and sold for the first time. The issuing company receives the proceeds of the sale to raise capital. In the secondary market, existing securities are traded among investors, and the issuer receives no cash.

9What is the standard settlement timeline for corporate debt instruments traded on the Nigerian over-the-counter (OTC) market?

A.T+1 (Transaction day plus one business day)

B.T+2 (Transaction day plus two business days)

C.T+0 (Same-day settlement)

D.T+3 (Transaction day plus three business days)

Explanation: Nigerian Treasury Bills and short-term debt instruments traded on the OTC market (such as FMDQ) typically settle on a T+1 basis. Settlement cycles for fixed-income instruments are set by the relevant exchange or OTC platform and can differ from the equity cycle.

10Which market operator maintains the official ledger of a company's shareholders and processes dividend payments?

A.Registrar

B.Custodian

C.Trustee

D.Broker-Dealer

Explanation: Registrars are capital market operators registered by the SEC to maintain the register of members (shareholders) of public companies, process share transfers, distribute dividends, and manage corporate actions.

About the SEC Nigeria Sponsored Individual Exam

The SEC Sponsored Individual Registration Examination is the mandatory licensing exam conducted by the Nigerian Capital Market Institute (NCMI) for professionals seeking to practice as registered sponsored officers under Capital Market Operators (CMOs) in Nigeria. The exam evaluates complete proficiency in Nigeria's capital market regulatory framework, including the Investments and Securities Act (ISA) 2025, SEC Rules and Regulations, categories of market operators, compliance systems, code of conduct, and anti-money laundering regulations.

Exam sponsor: Securities and Exchange Commission (SEC) Nigeria. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

100 multiple-choice questions

Time Limit

2 hours

Passing Score

70%

Exam / Certification Fees

₦150,000

Exam sponsor website

Reported exam pass rate: 70%. average candidate pass rate This describes exam candidates, not OpenExamPrep users or results from using our resources. Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Official sources

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

25%

Investments and Securities Act (ISA) 2025

Statutory establishment of the SEC, board structure, powers, and the Investments and Securities Tribunal (IST) jurisdiction.

25%

SEC Rules & Regulations

Registration of sponsored individuals, 2026 revised minimum capital requirements, filing deadlines, and fidelity bonds.

15%

Capital Market Operations & Instruments

Secondary market trading, CSCS clearing and settlement cycle (T+1, adopted June 2026), Islamic finance (Sukuk), and commodities markets.

15%

Capital Market Operators (CMO) Registration & Functions

Core roles, requirements, and compliance structures of Broker-Dealers, Issuing Houses, Fund Managers, Registrars, Trustees, and Custodians.

10%

AML/CFT/CPF Regulations & Compliance

NFIU reporting rules, individual (₦5M) and corporate (₦10M) CTR limits, PEP monitoring, and record-keeping mandates.

10%

Code of Conduct & Ethics

Fiduciary duties of operators, conflict of interest rules, and prohibited practices like insider trading, front-running, and churning.

Preparing for the SEC Nigeria Sponsored Individual Exam

What You Need to Know

Passing score: 70%
Assessment: 100 multiple-choice questions
Time limit: 2 hours
Exam / certification fees: ₦150,000 Official sources

Using Our Practice Resources

Work through all 100 available questions
Review every answer and explanation
Track weak areas and revisit them
Use our AI tutor for tough concepts

SEC Nigeria Sponsored Individual: Suggested Study Strategy

1Focus on the Investments and Securities Act (ISA) 2025, particularly the establishment, board, and powers of the SEC.

2Master the 2026 revised minimum capital requirements for CMOs, such as ₦2 Billion for Broker-Dealers.

3Know the notification timelines: notifying SEC within 5 working days for sponsored individual resignations.

4Understand AML/CFT/CPF rules, including the ₦5,000,000 CTR limit for individuals and ₦10,000,000 for corporate bodies.

5Review the jurisdiction and appeal process of the Investments and Securities Tribunal (IST), including the 30-day appeal timeline.

Frequently Asked Questions

What is the passing score for the SEC Nigeria Sponsored Individual Exam?

The passing score for the NCMI Pre-Registration Examination is 70%. Candidates who do not achieve this score are permitted to re-sit in subsequent quarters upon paying the re-sit fee of ₦100,000.

Who is required to take the NCMI Pre-Registration Exam?

All prospective sponsored individuals (such as Managing Directors, Executive Directors, Compliance Officers, and other key professionals) seeking initial registration with the SEC Nigeria as Capital Market Operators must undergo the training and pass the exam.

What are the fees for the NCMI Pre-Registration Training and Examination?

The fees are structured as: ₦150,000 for fresh candidates, ₦250,000 for executives, and ₦100,000 for returning candidates (re-sit). Payments must be made via the official SEC Remita platform.

How often is the SEC Nigeria Sponsored Individual Exam conducted?

The NCMI conducts the training and examination quarterly (four times a year). The sessions are typically virtual, allowing candidates from across Nigeria to participate.

What is the validity period of the SEC registration application?

According to SEC Rule 3(6)(b), an application for registration of a Capital Market Operator or sponsored individual expires if the applicant fails to satisfy all registration requirements (including passing the NCMI exam) within twelve (12) months of submission.