The Central Bank of Nigeria has unveiled a draft revision of its guidelines governing the licensing and regulation of Financial Holding Companies (FHCs), proposing stricter ownership, governance and capital requirements aimed at strengthening oversight across Nigeria’s financial sector.
The proposed framework, released in an exposure draft dated June 10, was circulated to financial holding companies, banks, other financial institutions and members of the public for review and feedback.
According to the apex bank, the review is intended to improve regulatory supervision, address existing operational gaps and ensure financial holding companies remain effective sources of support and stability for their subsidiaries.
The circular, signed by Rita Sike, Director of the Financial Policy and Regulation Department, noted that the original guidelines introduced in 2014 were designed to reduce risks associated with non-core banking activities conducted within banking groups.
However, after several years of implementation, the regulator said certain provisions now require updates to reflect emerging market realities and evolving regulatory standards.
“Following several years of implementation, the CBN has identified areas within the extant Guidelines that require enhancement to strengthen the operational effectiveness and regulatory oversight of Financial Holding Companies.
“Accordingly, the guidelines have been reviewed to address observed gaps and align with evolving regulatory and market developments.”
CBN Proposes 51% Minimum Equity Ownership Requirement
One of the most notable changes contained in the revised draft is a proposal requiring financial holding companies to maintain a minimum controlling interest in their subsidiaries.
Under the proposal, HoldCos would be required to hold at least 51 per cent equity ownership in each subsidiary operating within their group structure.
The draft also mandates that financial holding companies be officially recognised as persons with significant control by the appropriate corporate registration authority.
The CBN stated:
“Ownership and Control Requirements: Requiring FHCs to hold a minimum of 51% equity stake in each subsidiary and to be registered as a person with significant control by the appropriate corporate registration authority.”
Stronger Capital and Governance Standards
The regulator is also proposing enhancements to minimum capital requirements for financial holding companies.
According to the draft, the revised framework seeks to ensure HoldCos maintain sufficient financial capacity to provide support to their subsidiaries when required.
The CBN explained that stronger capital requirements would reinforce the role of financial holding companies as a dependable source of financial strength within banking groups.
Additionally, the revised guidelines seek to tighten oversight of shared service arrangements among entities operating within financial groups.
The move is designed to eliminate potential conflicts of interest, prevent operational abuse and ensure that banking subsidiaries do not receive unfair advantages through group structures.
Changes to Foreign Subsidiary Ownership Structure
Another major proposal would streamline the organisational structure of financial holding companies by allowing HoldCos to directly own equity interests in foreign subsidiaries.
Under the current arrangement, such ownership structures often involve Nigerian banking subsidiaries.
The revised framework would place foreign subsidiary ownership directly under the holding company, simplifying group structures and strengthening oversight.
The draft states:
“Organisational Structure: Streamlining the structure of FHCs by allowing them, rather than their Nigerian banking subsidiaries, to directly hold equity interests in foreign subsidiaries.”
New Eligibility Requirements for Promoters
The exposure draft also introduces clearer criteria for individuals and entities seeking to establish financial holding companies in Nigeria.
The CBN said the revised framework would establish defined eligibility standards for promoters, improving transparency and ensuring only qualified investors participate in the sector.
“Eligibility Criteria: Establishment of clear eligibility requirements for promoters seeking to set up Financial Holding Companies.”
Public Consultation Opens Until July 9
The apex bank has invited stakeholders, industry participants and members of the public to review the exposure draft and submit comments before the consultation period closes.
Interested parties are expected to forward their observations and recommendations to the CBN on or before July 9, 2026.
The review process forms part of broader efforts by the regulator to strengthen corporate governance, improve risk management and enhance the resilience of Nigeria’s financial system amid changing market conditions.
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