The National Pension Commission, PENCOM, has lifted the suspension of Pension Fund Administrators’ investments in commercial papers.
According to a PENCOM circular issued on Tuesday, the suspension was removed in response to the Securities and Exchange Commission’s draft guidelines on the activities.
Abdulqadir Dahiru, Head of the Investment Supervision Department at PENCOM, signed the circular, saying, “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.” As a result, to promote capital raising and maintain market stability, the commission has relaxed its limitation on LPFAs investing in commercial papers where capital market operators operate as IPAs.”
Regardless, PENCOM advised Licensed Pension Fund Administrators to conduct appropriate legal and financial due diligence on all prospectus/offer documents of all commercial papers before investing, as required by Section 2.9 of the Regulation on Investment of Pension Fund Assets.
