Abuja, Oct. 28, 2024 – The National Pension Commission (PenCom) has advised the Pension Fund Administrators, LPFAs, and Pension Custodians to suspend further investment in commercial papers where capital market operators and non-banks are engaged as IPAS.
PenCom gave the advice through a a circular with Reference no: PENCOM/TECH/ISD/2024/402 issued by Head, Surveillance Department of PenCom, A.M.Saleem, and dated Oct. 23, 2024.
The circular, addressed to Managing Directors and Chief Executives Officers of all LPFAs, advised the LPFAs to desist from investing in the affected portfolio pending the issuance of guidelines or regulations on the issuance of commercial papers by the Securities and Exchange Commission, SEC.
The circular reads: “PenCom has noted the increased investment by Licensed Pension Fund Administrators, LPFAs, in commercial papers issued by limited liability companies.
“It has also observed that the issuing companies have engaged capital market operators as Issuing and Placing Agents, IPAs, to manage the issuance and placement of these commercial papers.
“However, the commission is aware that SEC, the regulator of the capital market, currently lacks established rules and regulations governing the issuance of commercial papers.
“Consequently, all LPFAs are directed to immediately suspend further investment in commercial papers where capital market operators (non-banks) are engaged as IPAS.
“This is pending the issuance of guidelines or regulations on the issuance of commercial papers by SEC.”
It advised all the operators to ensure full compliance with the circular. (GBN)
