Business Nigeria brings in custody rules to guard $9.7 billion funds industry

Nigeria brings in custody rules to guard $9.7 billion funds industry

Nigeria brings in custody rules to guard $9.7 billion funds industry



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Economic system4 hours ago (Sep 19, 2021 11: 40AM ET)



By Felix Onuah and Chijioke Ohuocha

ABUJA (Reuters) -Nigeria has introduced custody guidelines for its 4 trillion naira ($9.7 billion) fund management alternate to guard investors and additional manufacture its capital markets, the Securities and Replace Price (SEC) acknowledged on Sunday.

Before the guidelines, funding managers warehoused securities and cash, which meant that investors may perchance lose in the event of a manager being declared bankrupt or insolvent.

“All consumer sources managed under discretionary and non-discretionary mandates are to be held under independent custodial agreements and custodial banks,” SEC director fashioned Lamido Yuguda educated Reuters

Yuguda acknowledged a prime quantity of home investors exited the capital market after a 2008 fracture wiped extra than 60% off inventory costs. He acknowledged the commission was once seeking to trap them help.

Nigeria has fewer than 500,000 individual accounts under different collective funding schemes, Yuguda acknowledged, adding that he was once having a peek to widen the sphere, ruin up between public and inner most fund managers.

“With the introduction of full custody … we’re at risk of peek a huge uptake of most of these products.”

Nigerian stocks are down 3.4% this year after rising 50% in 2020 as the sphere’s most attention-grabbing performing market. Nonetheless IPOs accept as true with yet to renew whereas a vulnerable economic outlook and forex risk coupled with the COVID-19 pandemic accept as true with afraid international investors.

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