The National Pension Commission has lifted the suspension it placed on Pension Fund Administrators regarding investments in commercial papers.
According to a circular issued by PENCOM on Tuesday, the suspension was lifted following draft rules on the activities by the Securities and Exchange Commission.
The Head, Investment Supervision Department, PENCOM, Abdulqadir Dahiru, who signed the circular, said, “The commission has noted that the Securities and Exchange Commission has developed draft rules and an amendment to rule 8 (Exemptions) to regulate the issuance of Commercial Papers by its regulated entities.
“Accordingly, the SEC is addressing the commission’s concern about the role of non-bank IPAs in commercial paper transactions by bringing them within regulatory boundaries.
“Consequently, to facilitate capital raising and ensure continued market stability, the commission has lifted its restriction on LPFAs investing in commercial papers where capital market operators act as IPAs.”
Regardless, PENCOM advised, Licensed Pension Fund Administrators to ensure that appropriate legal and financial due diligence are undertaken on all Prospectus/Offer Documents of all commercial papers before investment as stipulated in Section 2.9 of the Regulation on Investment of Pension Fund Assets.
