CBN Guidelines for Licensing and Regulation of Payment Service Holding Companies

(22pshc22)- The What; The Dos and The Do

INTRODUCTION

There have been notable regulatory developments in the framework for financial technology (Fintech) in recent times in Nigeria. The Central Bank of Nigeria has issued several guidelines implementing its policies for regulating Fintech related services in the Nigerian financial sector.


On August 3, 2021, the Central Bank of Nigeria (“CBN”) took another step furthering its commitment towards the promotion of an effective payment system in the country; by issuing a new governing regime for Payments Service Holding Companies (“PSHCs”), i.e. Guidelines for Licensing and Regulation of Payments Service Holding Companies in Nigeria (the “Guidelines”).


The Guideline seeks to prevent the commingling of activities, facilitate the management of risks within the payment service industry, and enable adequate regulatory oversight on the activities of licensed operators. It will complement the CBN Circular on New License Categorizations for the Nigerian Payments System, and other relevant subsidiary legislation made according to the Central Bank of Nigeria Act (2007) and the Banks and Other Financial Institutions Act (2020), as well as other regulatory instruments issued, from time to time, by the CBN and not forgetting other regulators in the Nigerian financial services sector.


Mainly, the scope of the Guidelines covers regulated activities in the payments service industry, such as; Mobile Money Operations, Switching and Processing, and Payment Solution Services, and any other action as may be subsequently approved by the CBN. Furthermore, a critical effect of this regulatory framework is that it is intended to create an enabling environment for the orderly management of Fintech companies in Nigeria. This Guideline seeks to ensure that no single company exercises a monopoly over all the activities in the payment service industry. Thus, thereby enhancing effectiveness and efficiency by allowing each company to focus on a particular service within a group. Finally, it aids the CBN in exercising its supervisory powers on all companies operating within the Group.


Following the release of this Guideline, companies in the payments services space who intend to operate more than one license category now have clear direction on setting up a Payments Service Holding Company (PSHC), with activities of subsidiaries clearly outlined. It sets the standard for the consolidation of payment service providers operating under the different license categories. The introduction of the regulatory framework aims to promote efficiency amongst operators in the payment services space, improve competition, and deepen financial inclusion in Nigeria.


Here are some provisions of the Guidelines companies intending to operate in more than one license category should look out for:


What is a Payment Service Holding Company?

For this regulation, a Payment Service Holding Company is a company whose principal object clause include the business of a holding company set up to make and manage equity investment in two or more companies, being its subsidiaries, which are Payments Service Providers across the following categories:
1. Mobile Money Operations
2. Switching and Processing
3. Payment Solution Services


Structure and Composition of a Payment Service Holding Company

A PSHC must be non-operating, existing solely to hold controlling equity investment in two or more companies in a parent-subsidiary arrangement. It is not allowed to engage in the day-to-day management and operations of subsidiaries. For it to exist, it must have a minimum of two subsidiaries, including a Mobile Money Operator (MMO) and a Switching company. Also, a PSHC must have a board size of between 5 and 10 or shall include, at least, an individual with requisite experience in the business(es) of the subsidiary payments service companies within the Group. Finally, a PSHC is permitted to have only two (2) hierarchies. Thus, it may have a subsidiary that is a parent to another subsidiary (i.e. an intermediate company). It is important to note that the subsidiaries of a PSHC are only permitted to have one more intermediate subsidiary.


Licensing and Commencement Operations and Corporate Governance

The Guidelines make extensive provisions on the licensing requirements, such as application fees, licensing fees, and other required information necessary for acquiring a PSHC license. Before commencing operations, a PSHC must provide certain information to the CBN, especially regarding capitalization. Additionally, corporate governance stands essential to the operations of a PSHC. Under the guidelines, the appointment to the board and management positions in a PSHC must align with the requirements of Assessment Criteria for Approved Persons’ Regime for Financial Institutions (The Approved Persons’ Regime), or any other applicable regulation issued by the CBN from time to time. Also, the rules on the disqualification of Board and Management, applicable to Other Financial Institutions (OFIs), shall apply to Payments Service Holding Company. Finally, a PSHC shall comply with the provisions of appropriate CBN Corporate Governance Guidelines and Include its audited financial statements among the contents of its website.


Ownership and Control

Considering how integral payment services companies are to the Nigerian financial system and, by extension, the country’s financial Stability, the CBN, through the guidelines, ensure proper checks on ownership and control of PSHCs. Consequently, prior approval of the CBN is necessary for anyone seeking to obtain up to 5 per cent (5% and above of shareholding in a PSHC. The acceptance of the CBN is also mandatory for any change in ownership, resulting in a change in control of the PSHC. Provided that such shares are acquired through the secondary market, the PSHC shall apply for approval from the CBN within seven (7) days of the acquisition.


Also, except with the prior written approval of the CBN, no Director, Shareholder, or Agent of a PSHC shall enter into an agreement that results in the change of control or transfer of shareholding of five per cent (5%) and above in the PSHC, provided that; in the case of secondary market transfers, the PSHC shall notify the CBN of such a change, within seven days.


Furthermore, subsidiaries of a PSHC are prohibited from acquiring shares in the PSHC or shares of other subsidiaries of their parent PSHC and the intermediate company of another subsidiary. And where a PSHC loses control of any of the two payments services subsidiaries – switching and processing company or mobile money operator – in the Group, for a period exceeding six (6) consecutive months, the PSHC shall cease to be a PSHC and will be required to return its license to the Central Bank of Nigeria for cancellation.


Also, suppose a PSHC with only two subsidiaries loses its controlling Interest in either of the subsidiaries for a period exceeding six (6) consecutive months. In that case, the PSHC shall cease to be a PSHC and will be required to return its license to the Central Bank of Nigeria for cancellation.


Permissible Activities

Payment Service Holding Companies can hold equity in financial and technological subsidiaries that facilitate or enhance innovative digital financial services. They are also allowed to provide broad policy direction, shared services and enter into technical or management service contract with any of its subsidiaries, with the prior written approval of the CBN, in respect of the following areas:


a. Human Resources services
b. Risk Management services
c. Internal Control services
d. Compliance services
e. Information and Communication Technology
f. Legal services
g. Facilities (office accommodation including electricity, security, cleaning services in that accommodation).


Non-permissible Activities

The extent of a PSHC’s operation is not universal. For example, all Payment Service Holding Company is prohibited from:

  1. Arrogating to itself any of the powers or functions of the Board of Directors, or internal management responsibilities and obligations of any of its subsidiaries or associates of any such subsidiary.
  2. Deriving or receiving income from sources other than the following:
    a. Dividend income from its subsidiaries/associates;
    b. income from shared services, where applicable;
    c. Interest earned from idle funds invested in government securities or placement with licensed financial institutions;
    d. Patents, royalties and copyrights;
    e. Profit on divestment from subsidiaries/associates; and
    f. Any other source as may be approved by the CBN.
  3. Being involved in the administration and approval process of its subsidiaries, if applicable.
  4. Requiring its subsidiaries or any of its agents to take directives or act on the instructions of the PSHC in its internal decision-making process, without prejudice to the definition of control as defined in the Guidelines.
  5. Engaging the services of any employee of any of its subsidiaries.
  6. Purchasing/disposing of assets from/to its subsidiaries without the prior written approval of the CBN.
  7. From appointing as a director, any person, who at the relevant time is a director of any of its subsidiaries, except with the prior written approval of the CBN. Where such an appointment is approved, the aggregate number of directors from the subsidiaries and associates, at any point in time, shall not exceed thirty per cent (30%) of the membership of the Board of Directors of the PSHC.


Prudential Regulation

Where a PSHC wholly owns its subsidiaries, then it must have a minimum paid-up capital that exceeds the sum of the minimum regulatory capital/total equity of all its subsidiaries, as may be prescribed from time to time by the CBN. Additionally, where a PSHC owns less than one hundred per cent (100%) of its subsidiaries, its minimum paid-up capital shall exceed the summation of its proportionate holding in the subsidiaries. Excess capital in one subsidiary shall not be used to make up a shortfall in another subsidiary. Furthermore, it is the capital of the PSHC that is applied to the subsidiaries. A PSHC is obligated to ensure that its subsidiaries comply with the minimum capital requirements for each license category in the Group.


Finally, other key provisions in the Guidelines relate to filing requirements, and this requires a PSHC to make quarterly filings to the CBN, which shall include information on compliance with corporate governance guidelines, whistleblowing, assets and liabilities of the PSHC and its subsidiaries, risk management, internal control, and intra-group transactions.


CONCLUSION

Overall, developing an effective payment system appears to be one of the main focuses for the Nigerian Central Bank. Given the rapid adaptation of technology in resolving payment problems in Nigeria, payment service companies must do well ensure they remain abreast with the CBN guidelines that govern their specific area of operation as the CBN will continue to adapt its rules to ensure that these companies contribute to the maintenance of Nigeria’s financial stability.


July 23, 2025
INTRODUCTION The second quarter of 2025 was marked by significant regulatory and legal developments impacting commercial activities across several key sectors in Nigeria. Notable advancements include progressive measures in maritime financing, heightened regulatory scrutiny within the capital markets, and emerging legal frameworks governing digital content. These developments reflect the ongoing evolutions of Nigeria's business and regulatory environments. In this edition of our Business Intelligence and Commercial Awareness (BICA) Report, we examine some of the most consequential developments from Q2 2025 and assess their practical implications for businesses currently operating in, or considering entry into the Nigerian market. To continue reading kindly click the link below: https://www.linkedin.com/posts/f-a-garrick-co_bica-q2-2025-activity-7346127668028846082-8PZA?utm_source=share&utm_medium=member_desktop&rcm=ACoAABAUkK4BLHDJ9A6wqUm8xCgnbKpUOotgd94
July 22, 2025
INTRODUCTION: Filmmaking in Nigeria, often celebrated for its creative brilliance —the storytelling, cinematography, and emotional impact, is much more than the pre-production, production and post-production process. What many do not see is the intricate legal framework that this creative process rests on; while the spotlight often shines on the talent in front of the camera, the real backbone of any successful production lies in the legal groundwork behind the scenes. From script to screen, every successful film is underpinned by a web of legal arrangements that secure intellectual property, define contractual relationships, manage risk, and ensure regulatory compliance. This comments on the key legal touch-points that every filmmaker, producer, screenwriter, and investor should know and would navigate to ensure their creative visions are compliantly created and exploited. The Ideation: Securing the Right to Tell the Story. Every film begins with an idea, but ideas alone are not protected by law. Under Nigerian and international copyright law, ideas are not protected; only a tangible expression such as a written script, can be protected under copyright [1] . The establishment of ownership via the authorship of a comprehensive documentation represents the foundational legal procedure in the filmmaking industry. Where screenwriters or creators adapt existing works, whether novels, news articles or real-life events, they must go a step further to secure adaptation rights. This often involves the execution of a rights acquisition agreement, usually in the form of an option contract. This contract grants temporary rights to adapt a work, often subject to clearly defined timelines and payment terms. A widely publicized example of the above is the controversy surrounding Òlòtūré, a 2020 Netflix original produced by Ebonylife Studios. Shortly after its release, the film drew criticism when investigative journalist Tobore Ovuorie claimed it closely mirrored her 2014 undercover exposé on human trafficking in Nigeria, originally published by Premium Times Newspaper. While the producers claimed to have obtained rights from Premium Times, the publisher of her story, Ovuorie contended that no one had the authority to license her life experience without her permission. Her claims sparked a wider conversation and spotlighted not only copyright considerations, but also moral rights and the ethical obligations filmmakers have especially when telling personal stories. In the end, the Òlòtūré case is a strong reminder that legal compliance is only the floor and not the ceiling. In matters involving real people and sensitive narratives, meaningful engagement is often as important as formal rights acquisition. Confidentiality is another concern at this stage. In practice, many filmmakers use Non-Disclosure Agreements (NDAs) to protect concepts when collaborating with potential partners or investors [2] . NDAs while not infallible, remain a useful tool for safeguarding ideas during the ideation stage. Pre-Production: Building the Legal Foundation Once the creative direction is set, the focus shifts to establishing the film’s legal and operational structure. The corporate set-up and structuring is usually the first box to tick during the pre-production phase. Filmmakers and producers typically incorporate a special purpose vehicle (SPV), usually a limited liability company [3] . This is to ring-fence the project, provide personal liability protection, as well as clear management of tax, accounting and contractual obligations. Financing would typically follow corporate set up and this requires extensive legal overview and diligence. Amongst others, investor agreements remain relevant hereunder. They address the issues surrounding the investment and finance framework including but not limited to; return on investment, ownership rights, and profit-sharing. Although rarely, capital may be raised from the public; where this is the case, securities regulations will apply. Again, there is an attention to human resource as such talent and crew contracts remain relevant to the film making industry and architecture. There contracts must and should clearly outline obligations around responsibilities, compensation, credit entitlement, and dispute resolution mechanisms etc. This helps reduce ambiguity and mitigate the risk of post-production dispute. Another area of concern will be the permits and licensing right relating to locations and filming. Permission must be obtained for filming on private and public property. In many countries, including Nigeria, filming in a location without authorization can lead to lawsuits, equipment seizure, or production shutdown [4] . Production: The Legalities surrounding “Action!” “Cameras, Lights, Action!”. As cameras begin to roll, legal stakes begin to materialize in real time. A plethora of legal considerations ranging from consent to regulatory compliance come to life during this phase. Whilst preparing for on-screen appearance by actors, extras or general members of the public, consent must be gotten, and filmmakers are encouraged to obtain release forms from individuals appearing onscreen. This is especially important for documentary projects or public footage, where lack of consent can expose the production to privacy or defamation claims. Production must comply with applicable labour laws [5] , regarding working hours, wages, health and safety regulations. Where personnel are unionized, compliance with the terms of collective bargaining agreements is important as non-adherence may attract regulatory sanctions or litigation. Insurance is also a consideration that must be at the top of the list as it acts a shield in the face of liability. Two major forms of insurance; Errors & Omissions (E&O) insurance- which covers legal risks like defamation, copyright infringement, or invasion of privacy [6] and general liability insurance which covers accidents or injuries on-set. Lack of adequate insurance could jeopardize production as a single legal claim could bankrupt the entire project. Also, Brand logos, artwork, music, or even incidental background visuals must be cleared or licensed. Failure to do so can trigger infringement actions and post-production delays. Post-Production: Finalising Rights and Risks The editing room may feel far from legal issues, but this stage is where creative and legal threads converge. In the editing room, attention turns to licensing, credit, compliance, and final clearances. First, proper documentation around the use of music must be in place. Music requires two licenses- a synchronization license for the composition, and a master use licence for the specific recording. The use of unlicensed music, even for a few seconds, could lead to copyright infringement [7] . A failure in this area can be costly, as demonstrated in the case of Multichoice Nigeria Ltd. v. Musical Copyright Society of Nigeria Ltd./Gte [8] where a ₦5.9 billion judgment was awarded against Multichoice for unauthorised use of 18 musical works by the Federal High Court in Lagos. The Court of Appeal upheld the decision, affirming that unauthorised use—whether recorded or performed—constitutes actionable infringement. Comprehensive legal audit and risk assessment are important during the post-production phase. Films that incorporate third-party footage, interviews, or controversial subjects may also face defamation or privacy claims. A legal audit ensures that all rights have been secured and that no defamatory, unlicensed, or private material remains. Before a film can be distributed, streaming platforms and broadcasters require a full chain of title—a documented trail of ownership from idea to final production. If any ownership rights are unclear, this may present a block to distribution or broadcasting of the film. Distribution: Protecting Value and Enforcing Rights Distribution is the final legal frontier—and often the most consequential for revenue generation. Distribution agreements define who can distribute the film, in what territories, for how long, formats (e.g., cinema, streaming, DVD). The agreements also govern revenue sharing, exclusivity and language or subtitle terms. Streaming platforms like Netflix or Prime often require exclusivity periods and specific licensing agreements. Additionally, films must comply with censorship and classification laws. In Nigeria, for instance, the National Film and Video Censors Board (NFVCB) [9] must review and approve films before public release. Non-compliance can attract fines or bans. Finally, legal counsel is needed to manage royalty agreements. Where, cast, writers, or financiers are entitled to royalties or profit share, well-drafted backend agreements are essential to avoid future disputes and ensure fair compensation. CONCLUSION Filmmaking is art, but beneath the artistry lies an elaborate legal system without which no film can be safely made or commercially exploited. From the ideation through post-production and distribution, legal considerations shape every stage of the creation process. The law and legal counsel are not a postscript to the filmmaking process; it is the quiet but crucial backbone behind every frame and a necessary consideration for Nigerian filmmakers aiming to compliantly penetrate both local and international markets. [1 ] Copyright Act, 2022 [2] Non-Disclosure Agreement (NDAs) For Film And TV Executives In Nigeria [3] Section 21, Companies and Allied Matters Act 2020 [4] Section 17, National Film and Video Censor Board Act 1993 [5] Labour Act, 1971 [6] Olisa Agbakoba Legal, S.E.T Guide to Entertainment Law, (2022), 20 [7] Section 15 (1) of the Nigerian Copyright Act, CAP C28, LFN 2004 [8] (2020) 13 NWLR (Pt. 1742) 415. [9] Section 17, National Film and Video Censor Board Act 1993
May 30, 2025
1.0. INTRODUCTION Over the years, sports have evolved beyond the receptive games to be played for either leisure or regional competition to global commercial enterprises. With events such as the FIFA World Cup, the UEFA Champions League, and the Olympics, one could argue for the gradual globalisation of sports. However, a deeper review of this process reveals the step-by-step adoption on technology and media in the said globalisation; and this in turn opens a whole world of issues around intricate productions involving intellectual property, sponsorships, media rights, and extensive contractual framework. What appears onscreen on-demand, is underpinned by meticulously crafted legal and business arrangements that enable cross border entertainment, while also embracing innovation, and advancement of commercial value as well as the mechanism for its protection. This article will comment on lifecycle of sports media and branding rights, providing a legal and commercial roadmap for international stakeholders, with a core mention of Nigerian legal framework. 1.1. The Games Before The Game: Where Rights Begin A sporting event seen on screen represents a combination and intersection of rights, agreements, and negotiations established long before the game itself. Elements such as match footage, player imagery, and pitch-side ads are meticulously claimed, licensed, or sold by stakeholders ranging from governing bodies like FIFA and CAF to individual clubs and players. Governing bodies like Fédération Internationale de Football Association (FIFA) or Confederation of African Football (CAF) often control broadcasting rights and official branding; Clubs handle their trademarks and merchandising, while players, depending on the jurisdiction and their contracts, may retain significant control over image use. In Nigeria, these rights are governed primarily by the Copyright Act 2022, the Trademarks Act, and general contract law. Globally, the WIPO Draft Broadcasting Organizations Treaty seeks to provide unified protection against transnational piracy, though its implementation remains pending. While legislation is germane, the allocation of rights determines visibility, which in turn dictates commercial value. For example, a sponsor may invest significant resources for their brand to appear prominently on a player’s jersey; if the broadcaster’s camera angles fail to display this placement effectively, disputes may arise over liability, highlighting the complexity of coordinating rights and visibility. 1.2. Broadcasting: The Soul of Sports Economics Broadcasting rights, legal licenses, which grant entities the authority to record, transmit, and distribute sporting events across television, radio, and digital plat- forms, form the backbone of the sports economy. These rights influence how and where sports are consumed, and more importantly, who profits from them. Broadcasting deals often determine the visibility of a sport or league. A single contract can propel a domestic competition to international fame or render it virtually invisible. Broadcasting contracts typically divide rights by territory, impose exclusivity, and adhere to strict timeline. SuperSport’s exclusive broadcasting rights for the English Premier League in Nigeria exemplify how market power and legal exclusivity intersect and give an indication of the high stakes involved. The high stakes of these deals invite fierce legal battles. Unauthorised broadcasting — even a short clip aired by a local station — can trigger swift legal action: injunctions, takedown notices, and litigation under intellectual property and broadcasting regulations. Nigerian courts are increasingly proactive in addressing violations, issuing in- junctions and damages to safeguard broadcasting rights. This was clear in the cases of Nigerian Copyright Commission v. Joseph Daomi (1) and Nigerian Copyright Commission v. Stanley Nwankwo (2) where the accused were both convict- ed for the illegal distribution of a broadcast signal. Notwithstanding these strides, the digital age has further complicated enforcement. Pirated content spreads rapidly through social media and messaging apps, outpacing legal remedies. Even the most robust broadcasting contracts may falter when faced with jurisdictional challenges or technological barriers. 1.3. The Screen as a Billboard-Sponsorship Rights and Deals Sponsorships are where legal rights and commercial branding meet. Imagine a football match with no logos, branded kits, or digital billboards — it would look almost unfamiliar. Sponsorships transform the broadcast screen into prime advertising opportunities. Sponsors don’t pay to support the game per se; they pay for visibility — to have their brand appear on screen, in post-match highlights, and across social media. Consequently, sponsorship contracts are heavily negotiated, and often include exclusivity clauses- preventing rival brands from sharing screen space-, morality clauses- allowing termination if an athlete damages the brand’s reputation- and 0n-screen guarantee clauses- ensuring brand visibility during key moments. Legal disputes may arise when a player’s personal sponsorship conflicts with the team or league’s official sponsors. These cases often require arbitration or court intervention to interpret competing contractual obligations. 1.4. Protection and exploitation of Image Rights: An Athlete’s Brand As athletes gain popularity, their image rights become valuable assets, especially when it comes to sports broadcasting and sponsorship deals. Athletes are no longer just competitors; they are influencer, brands, and public figures. Image rights — the legal right to control the commercial use of one’s identity — encompass name, likeness, signature, voice, and other personal at- tributes. 1. Trademark Registration Athletes can register their name, logo, or signature as trademarks under the Nigerian Trademarks Act.(3) This grants them exclusive commercial rights and legal recourse against unauthorised use. 2. Passing Off Under Nigerian common law, an athlete can sue for “passing off” where their image is used without consent in a way that causes reputational or financial harm. However, for such claim to succeed, they must show goodwill, misrepresentation, and damage (see NOKIA Corp v. Intercellular Nigeria Ltd ).(4) 3. Contractual Protections Image rights agreements which are sophisticated in nature often accompany endorsement and sponsorship deals, setting out the way and manner in which an athlete’s likeness can be used, as well as the duration. 2.0 Challenges and Emerging Legal Questions As the sports industry evolves, so do legal challenges. Key recurring questions include: Who owns broadcast footage — the league, broadcaster, or athlete? And to what extent does this ownership lie? How should courts resolve conflicts between personal image rights and league broadcasting rules? What remedies exist for athletes whose images are exploited online with- out consent? A limitation to image rights still lingers, while copyright under the Copyright Act 2022 protects original works like photographs and videos, it does not ex- tend to personal identity. For example, a photo of an athlete is owned by the photographer, not the athlete — unless transferred. 3.0 Conclusion In Nigeria and beyond, sports are no longer just about goals and glory, it has mutated into a high-stakes legal arena involving complex rights, cross-border contracts, and millions in sponsorship and broadcasting revenue. Whether it’s a shaky Facebook Live stream, a branded jersey, or a player’s endorsement deal, every piece of the game is backed by a legal contract. For stakeholders — athletes, sponsors, broadcasters, and regulators — under- standing and enforcing these rights is critical. While Nigeria’s legal framework is still evolving, robust use of intellectual property law, contract law, and com- mon law principles can offer meaningful protection. 55 NIPJD [FHC, 2012] MKD/CR/38 55 NIPJD [FHC, 2012] ABJ/CR/14/2011 Cap T13, Laws of the Federation of Nigeria 2004 (2003) 12 v Pt 836, 22