In a move aimed at bolstering investor engagement and securities lending operations in Nigeria’s capital market, the Securities and Exchange Commission (SEC), National Pension Commission (PENCOM), and Nigerian Exchange Limited (NGX) have reaffirmed their commitment to further developing the securities lending landscape.
This commitment was highlighted during the recently held NGX Securities Lending workshop, which served as a platform for diverse stakeholders to explore ways to deepen securities lending in Nigeria.
The virtual workshop, themed “Business Facilitation Act 2023 as a catalyst for deepening Securities lending in Nigeria,” was organized in collaboration with Central Securities Clearing System Plc (CSCS), Cardinalstone Partners, Stanbic IBTC Nominees, and the Pension Fund Operators Association of Nigeria (PenOps).
The event brought together a wide spectrum of participants, including retail and institutional investors, Pension Funds Administrators (PFAs), Fund Managers, ETF Issuers, regulators, and policymakers.
Jude Chiemeka, the Divisional Head of Capital Markets at NGX, emphasized the significance of the recent legislative developments in his opening remarks.
He pointed out that the Business Facilitation (Miscellaneous Provisions) Act, 2022, signed into law on February 14, 2023, marked a pivotal milestone.
This legislation resulted in crucial amendments to Section 89 (2) of the Pension Reform Act, permitting pension assets to be utilized in securities lending, subject to guidelines set forth by PENCOM.
Chiemeka highlighted that these amendments open up new horizons within Nigeria’s securities landscape, particularly benefiting institutional investors like Pension Fund Administrators.
He underscored NGX’s commitment to collaborating closely with PENCOM to deepen the securities lending domain for the betterment of Retirement Savings Account (RSA) holders and the broader pension industry.
This collaborative effort, he emphasized, aims to foster growth and development within the Nigerian capital market and extend its impact across the African continent.
Speaking on behalf of SEC, Abdulkadri Abass, the Director of Registration, Exchanges, Market Infrastructure, and Innovation, expressed the regulator’s dedication to maintaining a just, organized, and efficient market that prioritizes the interests of investors.
Abass emphasized that the provisions within the Business Facilitation Act, enabling Pension Fund Administrators to engage in securities lending, will undoubtedly enhance market depth and liquidity.
Ibrahim Kangiwa, the Head of Investment Supervision at PENCOM, echoed this sentiment, noting that the enactment of the Business Facilitation Act in 2023 empowered PENCOM to develop guidelines aimed at facilitating securities lending in collaboration with NGX and other stakeholders.
Kangiwa revealed that the commission is actively working on formulating these regulations and processes, with plans to unveil guidelines for PFAs by the end of the year.
Panel discussions during the workshop delved into various aspects of the securities lending landscape, with participants addressing challenges such as limited awareness and insufficient securities supply.
Panelists stressed the importance of increased collaboration among stakeholders to drive growth and activity within the securities lending space.
The CEOs of PenOps, Stanbic Nominees, CardinalStone Securities, and the President of the Fund Managers Association of Nigeria provided valuable insights during these discussions.
