The National Pension Commission (PenCom) has directed licensed pension fund administrators (LPFAs) to suspend further investment in commercial papers with immediate effect.
Commercial paper is a short-term debt instrument issued by corporations to finance inventory, accounts payable, payroll, and other short-term liabilities.
In a circular with reference number ‘PENCOM/TECH/ISD/2024/402’, dated October 23, and signed by the Head surveillance department of PenCom, A.M. Salem, the commission said the Securities Exchange Commission (SEC) did not have established regulatory framework on the issue.
According to the News Agency of Nigeria, the circular was addressed to managing directors and chief executives officers (CEOs) of all LPFAs.
PenCom warned the LPFAs to desist from investing in the affected portfolio pending the issuance of guidelines on the issuance of commercial papers by the SEC.
“PenCom has noted the increased investment by Licensed Pension Fund Administrators (LPFAs) in commercial papers issued by limited liability companies,” the commission said.
