PenCom eyes securities’ lending by PFAs

The National Pension Commission has said it is working on regulations that will enable Pension Fund Administrators to participate in securities’ lending as an investment option in the capital market.

It disclosed this on Wednesday during a workshop organised by the Nigerian Exchange Limited, Securities and Exchange Commission and PenCom. The theme of the workshop was ‘Business Facilitation Act 2023 as a catalyst for deepening securities lending in Nigeria.’

The Head, Investment Supervision at PenCom, Ibrahim Kangiwa, said the provisions of section 89 of the Pension Reform Act 2014 had restricted PFAs from participating in securities’ lending.

Kangiwa said, “As you know, 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 added that securities’ lending was something that had been on the radar of the commission before now.

“Coincidentally, we are looking at the investment regulations that guide the investment activities of PFAs. We are trying to update it and amend certain aspects of the regulations to broaden the available assets and also deepen it in terms of what is on offer for PFAs.

Meanwhile, the Divisional Head, Capital Market at the NGX, Jude Chiemeka, in his welcome address, said the exchange remained committed to collaborating with other stakeholders to improve securities’ lending.

“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.