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The National Pension Commission (PenCom) has announced its intention to formulate regulations that will enable Pension Fund Administrators (PFAs) to engage in securities lending within the capital market as an investment alternative.
This announcement was made during a workshop jointly organized by the Nigerian Exchange Limited, the Securities and Exchange Commission, and PenCom. The workshop centered around the theme ‘Business Facilitation Act 2023 as a catalyst for deepening securities lending in Nigeria.’
Ibrahim Kangiwa, the Head of Investment Supervision at PenCom, highlighted that the current regulations, particularly section 89 of the Pension Reform Act 2014, had placed restrictions on PFAs’ involvement in securities lending.
Kangiwa elaborated, “Section 89 of the Pension Reform Act 2014 has provisions regarding restrictions on sale and borrowing of pension assets. This has been a major encumbrance to securities lending. With the passage of the Business Facilitation Act 2023, it has now actually enabled us to proceed with developing guidelines towards securities’ lending.”
He also noted that securities lending had been under consideration by the commission for some time.
“Interestingly, we are revisiting the investment regulations that govern the investment activities of PFAs. We are in the process of updating and amending specific aspects of the regulations to expand the range of available assets and to enhance the options for PFAs.”
In the same vein, Jude Chiemeka, the Divisional Head of Capital Market at the NGX, stated in his welcome address that the exchange was committed to collaborating with all stakeholders to improve securities lending.
“We pledge to sustain our collaboration with all stakeholders to collectively contribute towards the advancement of securities lending transactions and ultimately, towards the goal of capital market development in Nigeria and Africa,” he affirmed.
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