Reps move to overhaul 69-year-old investment law
The House of Representatives has proposed expanding investment options for trust funds while introducing stricter safeguards to protect beneficiaries under a planned overhaul of Nigeria’s 69-year-old Trustee Investment Act.
The proposed legislation, HB.2762, seeks to repeal the existing Trustee Investment Act, Cap T22, Laws of the Federation of Nigeria, 2004, and replace it with a new Trustee Investment Act, 2026.
The bill, sponsored by the Chairman of the House Committee on Capital Market and Institutions, Solomon Bob, was discussed at a public hearing in Abuja on Monday.
Speaking at the hearing, Speaker of the House, Tajudeen Abbas, said the existing law had become inadequate to regulate trust investments amid changes in the nation’s financial markets.
Abbas, represented by Dahiru Abubakar Sarki, said the proposed reform would expand investment opportunities while strengthening fiduciary responsibilities, regulatory oversight and protection for beneficiaries.
He warned that restrictive investment rules could deny beneficiaries reasonable returns, while weak regulations could expose their assets to avoidable risks.
“The governing principle must remain unmistakable: trustees hold assets for the benefit of others, not for their personal advantage,” he said.
Bob said the 1957 law was introduced when Nigeria’s investment options were largely limited to Federal Government bonds, but the country’s financial market had since grown significantly.
He put the capital market’s value at over N80tn and pension assets at more than N30tn, noting that emerging investment instruments were not covered by the existing legislation.
Under the proposed law, trustees would be permitted to invest in corporate bonds, equities, exchange-traded funds, collective investment schemes, real estate, private equity, regulated virtual assets and foreign investments through licensed custodians.
The bill also proposes a 20 per cent investment limit in a single issuer to reduce concentration risks.
To strengthen accountability, trustees would be required to observe obligations of loyalty, prudence, care and impartiality, alongside mandatory fair valuation of trust assets and annual reporting to beneficiaries.
The legislation would also allow trustees to delegate investment responsibilities to professional fund managers and custodians while retaining responsibility for their selection and supervision.
It further proposes restrictions on speculative dealings, futures contracts and unregulated investment schemes.
Bob said the Minister of Finance would be empowered to issue regulations in consultation with the Securities and Exchange Commission and other relevant regulators.
He urged stakeholders to examine the proposed investment categories, diversification threshold and possible overlaps with existing SEC and PenCom regulations.
The committee chairman also called for adequate protection for small family trusts, stressing that ordinary beneficiaries should receive the same safeguards as institutional investors.
“The widow in Sokoto whose husband left N2m in trust deserves the same protection as a billion-naira pension fund,” he said.
The public hearing is expected to provide an opportunity for financial market operators, regulators, legal practitioners and estate administrators to make recommendations before the committee concludes work on the bill.
Discussion0