The National Pension Commission has stated that regulations are being developed to allow Pension Fund Administrators to engage in securities lending as a form of participation in the capital market.
It made this disclosure on Wednesday during a session hosted by PenCom, the Securities and Exchange Commission, and the Nigerian Exchange Limited.
The workshop’s focus was on the role of Nigeria’s Business Facilitation Act 2023 as a stimulus for expanding securities lending.
The Head of Investment Supervision at PenCom, Ibrahim Kangiwa, claimed that the Pension Reform Act of 2014’s provisions had prohibited PFAs from taking part in securities lending.
“As you know, section 89 of the Pension Reform Act 2014 contains provisions regarding restrictions on the sale and borrowing of pension assets,” Kangiwa stated.
“This has significantly hampered the lending of securities. The Business Facilitation Act 2023’s passing has really made it possible for us to move forward with creating regulations for lending securities.”
Additionally, he said that the commission has previously considered lending securities.
“We are also looking at the investment regulations that govern PFA investment activities.”
“To increase the variety of assets available and the depth of what is being offered for PFAs, we are attempting to modernize it and alter certain sections of the regulations.”
The NGX’s Divisional Head for Capital Market, Jude Chiemeka, stated in his welcome speech that the exchange remained dedicated to working with other stakeholders to enhance securities financing.
“We promise to continue our collaboration with all stakeholders to collectively contribute towards the enhancement of securities’ lending transactions and, ultimately, towards the goal of capital market development in Nigeria and Africa,” he said.