PenCom Lifts Ban on Commercial Paper Investments
By Patience Ikpeme
The National Pension Commission (PenCom) has lifted its previous restriction on Licensed Pension Fund Administrators (LPFAs) investing in commercial papers where non-bank capital market operators serve as Issuing and Paying Agents (IPAs).
The decision follows the Securities and Exchange Commission’s (SEC) development of draft rules to regulate commercial paper issuance, addressing concerns raised by PenCom regarding the absence of a regulatory framework for non-bank IPAs.
In a statement released on Tuesday, December 3, 2024, PenCom clarified that LPFAs are now permitted to invest in commercial papers issued by non-bank entities, provided they conduct thorough legal and financial due diligence on all commercial paper prospectuses, as stipulated in Section 2.9 of the Regulation on Investment of Pension Fund Assets.
This move is expected to facilitate capital raising for businesses and contribute to the stability of the capital market. By lifting the restriction, PenCom aims to create a more conducive environment for investment and economic growth.
