Comparative Analysis of the Legal and Regulatory Frameworks for Asset-Backed Securities inSouth Africa, Malaysia, and Nigeria

Abstract

This paper provides a comparative analysis of the legal and regulatory frameworks governing asset-
backed securities (ABS) in South Africa, Malaysia, and Nigeria. The objective is to examine how legal
structures influence the development, stability, and investor confidence in securitization markets across
these jurisdictions. The study evaluates the historical evolution of ABS, existing regulations, operational
challenges, and the impact of these legal frameworks on financial markets. The paper utilized the
doctrinal research methodology to review legislative instruments, regulatory policies, and market
performance indicators across the three jurisdictions. The study draws insights from financial laws,
government regulations, and scholarly literature to highlight key similarities and differences in
securitization practices. The paper found that South Africa and Malaysia have well-developed ABS
markets due to structured regulations, strong financial institutions, and high investor confidence. South
Africa's securitization framework benefits from clear government policies and regulatory oversight,
while Malaysia has successfully integrated Islamic finance principles into ABS markets. Conversely,
Nigeria's ABS market remains underdeveloped, primarily due to the absence of a dedicated legal
framework, regulatory gaps, and low investor participation. The paper recommends legal reforms in
Nigeria, including enacting a specific securitization law, enhancing regulatory oversight, and
promoting market transparency. It also recommends adopting international best practices and
strengthening credit rating systems to improve investor confidence. By implementing these measures,
Nigeria can foster a more robust securitization market, contributing to financial stability and economic
growth.