SEC Mandates Custody of Funds, Over N2.36 Trillion Now Under Custody

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The Securities and Exchange Commission (SEC) has disclosed that it has brought about N2.36 trillion in discretionary and non-discretionary funds under custody following updates to the guidelines for Collective Investment Schemes in the country.

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Last December, the commission proposed amendments aimed at addressing complaints within the Collective Investment Scheme segment of the capital market.

In a notice on its website titled ‘Exposure Of New And Sundry Amendments To The Rules And Regulations Of The Commission’, the SEC revealed the new amendments to its regulations.

Speaking at a media briefing after the first quarter Capital Market Committee meeting, Dr. Okey Umeano, the Chief Economist at SEC, explained that the funds in the discretionary and non-discretionary windows had been brought under custody to enhance investor protection.

Umeano stated, “Before the update to the rules, only the Collective Investment Schemes were put in custody. The funds in discretionary and non-discretionary products were not in custody. To further protect investors, we mandated all funds to be put in custody.”

He added, “At the end of the first quarter, we had N2.14 trillion in CIS funds and N2.36 trillion in discretionary and non-discretionary funds, all in custody.”

Former SEC Director-General, Lamido Yuguda, highlighted that while assets management and custody are typically separated, the arrangement only applied to public CIS, not bilateral arrangements.

With the new rules, all funds were mandated to be held by custodians.

Yuguda emphasized, “The object of this is to improve trust, ensure investor assets are protected, and give the market a boost.”

Meanwhile, President Bola Tinubu announced a new board for the commission, appointing Emomotimi Agama as the new SEC Director-General, replacing Yuguda. The new SEC board is chaired by Mairiga Katuka, with other members including Frana Chukwuogor, Bola Ajomale, Mrs. Samiya Hassan Usman, Mr. Lekan Belo, and Garba Kurfia.


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