The Nigerian House of Representatives is seeking to introduce a 20 per cent cap on trust fund investments in a single issuer. This move aims to prevent excessive exposure to financial risks and protect beneficiaries' assets. The proposal is part of the Trustee Investment Bill, 2026, which seeks to repeal and re-enact the Trustee Investment Act of 1957. The bill was discussed at a public hearing held at the National Assembly in Abuja.
The Chairman of the House Committee on Capital Market and Institutions, Solomon Bob, presented the proposed investment limit. He stated that the existing law no longer reflects the realities of Nigeria's financial market. The capital market is currently valued at over 80 trillion naira, while pension assets have exceeded 30 trillion naira. The proposed legislation aims to expand permissible investments to include equities, corporate bonds, and real estate investment trusts.
The Trustee Investment Bill, 2026, also seeks to strengthen prudence, loyalty, transparency, and accountability in trust fund investments. The 20 per cent limit will prevent trustees from concentrating excessive trust assets in a single institution. This move is expected to safeguard beneficiaries' assets and promote a more diversified investment portfolio. The bill will also permit investments in infrastructure funds, private equity, and other regulated financial instruments.
The Speaker of the House, Dr Abbas Tajudeen, emphasized the need for a modern trustee investment framework. He stated that the proposed review is necessary to align the trustee investment framework with developments in the financial sector. The Speaker, represented by Dahiru Abubakar Sarki, urged stakeholders to make meaningful contributions to the bill. He stressed that the success of the bill should be measured by its ability to protect assets, strengthen confidence, and deliver lasting benefits to beneficiaries.
The public hearing on the bill had a poor turnout, with only three of the 12 invited institutions attending. The Securities and Exchange Commission, Debt Management Office, and Association of Corporate Trustees were the only institutions that participated in the hearing. Solomon Bob expressed disappointment at the low turnout, highlighting the importance of stakeholder engagement in the legislative process.
A modern trustee investment framework is expected to help mobilize long-term domestic capital for infrastructure development and enterprise growth. The proposed legislation will provide a more robust and effective regulatory framework for trust fund investments. This, in turn, will promote confidence in the financial sector and ensure that beneficiaries' assets are protected.
The Trustee Investment Bill, 2026, is a significant step towards strengthening the regulatory framework for trust fund investments in Nigeria. The proposed 20 per cent cap on trust fund investments in a single issuer is a key provision aimed at preventing excessive exposure to financial risks. The bill's passage is expected to have a positive impact on the financial sector and promote economic growth.
Key points
- The proposed 20 per cent cap on trust fund investments in a single issuer aims to prevent excessive exposure to financial risks.
- The Trustee Investment Bill, 2026, seeks to expand permissible investments to include equities, corporate bonds, and real estate investment trusts.
- The proposed legislation aims to strengthen prudence, loyalty, transparency, and accountability in trust fund investments.
