By Tony Obiechina, Abuja

The National Pension Commission (PenCom) has lifted its suspension on investments in commercial papers by Licensed Pension Fund Administrators (LPFAs) where non-bank capital market operators act as Issuing and Paying Agents (IPAs).This decision comes after the Securities and Exchange Commission (SEC) took steps to address regulatory concerns related to the role of these non-bank operators in commercial paper transactions.

In a circular issued on Dec. 3, signed by Abdulqadir Dahiru, the Commission’s Head of the Investment Supervision Department, PenCom made reference to its earlier directive, which called for an immediate halt on such investments.The suspension was put in place due to the lack of clear regulatory guidelines governing the involvement of non-bank IPAs in commercial paper issuances. The Commission raised concerns that the absence of rules from the SEC left these transactions outside established regulatory frameworks, potentially exposing pension fund investments to unnecessary risks.However, with the SEC now having developed draft rules and proposed amendments to Rule 8 (Exemptions) for the regulation of commercial paper issuances by its regulated entities, PenCom has decided to lift the restriction.The updated SEC rules aim to bring the involvement of non-bank IPAs within regulatory boundaries, thereby addressing PenCom’s earlier concerns.The circular partly reads: “The Commission has noted that the Securities and Exchange Commission (SEC) has developed draft rules and an amendment to rule 8 (Exemptions) to regulate the issuance of Commercial Papers by its regulated entities.”Accordingly, the SEC is addressing the Commission’s concern about the role of non-bank IPAs in Commercial Paper transactions by bringing them within regulatory boundaries.“Consequently, to facilitate capital raising and ensure continued market stability, the Commission has lifted its restriction on LPFAS investing in commercial papers where capital market operators act as IPAs. Nonetheless, LPFAS must ensure that appropriate legal and financial due diligence is undertaken on all Prospectus/Offer Documents of all commercial papers prior to investment as stipulated in Section 2.9 of the Regulation on Investment of Pension Fund Assets.”Major highlights of the circularLPFAs are required to carry out thorough legal and financial due diligence on all commercial paper prospectuses and offer documents before proceeding with investments. This aligns with PenCom’s Regulation on Investment of Pension Fund Assets, specifically Section 2.9, which mandates stringent checks to ensure the safety and soundness of pension fund investments.The SEC’s draft rules and amendments to Rule 8 address PenCom’s concerns, ensuring that all parties involved in the commercial paper process are adequately regulated, promoting transparency and financial stability in the market.The lifting of the restriction is expected to facilitate smoother capital-raising efforts in the Nigerian financial markets, while also ensuring that the integrity and stability of pension fund assets are maintained. The decision to reinstate investment in these instruments comes at a time when capital markets are increasingly seen as a vital source of funding for corporate entities and government projects.In Oct., PenCom ordered Licensed Pension Fund Administrators and Custodian Fund to immediately suspend further investment in commercial papers where capital market operators and non-banks, are engaged as IPAS. In a circular with Reference No: PENCOM/TECH/ISD/2024/402, dated October 23, 2024, by Head, Surveillance Department of PenCom, A.M. Saleem, addressed to Managing Directors and Chief Executives Officers of all LPFAs, the commission warned the LPFAs to desist from investing in the affected portfolio pending the issuance of guidelines or regulations on the issuance of commercial papers by the SEC.

By Mike Odiakose, Abuja

Deliberations in the House of Representatives went wild yesterday over President Bola Tinubu’s controversial Tax Reform Bills.The rowdy session was ignited by the House Spokesperson and Chairman of the Media and Publicity Committee, Akin Rotimi, when he made a remark expressing support for the tax bills.

Mr. Rotimi, standing in for the absent Committee Chair, Boma Goodhead, attempted to present a report on Nigerian Content Development and Monitoring. Rotimi said: “My name is Akin Rotimi Jr. I represent the people of Ekiti North comprising Ikole and Oye Local Governments. Mr. Speaker, I am from Ekiti State, the first state whose National Assembly Caucus has unanimously endorsed the tax bills.”His remark led to an uproar, with lawmakers vocally opposing the statement and chanting “No, No, No!”In a bid to put the situation under control, the Speaker, Tajudeen Abbas, quickly intervened and said Rotimi’s remark should not be taken seriously.The Speaker cautioned him, saying: “Restrict yourself to the subject matter. We are not discussing tax bills, as this is a very controversial issue. On your behalf, I withdraw the statement.”Rotimi apologized and retracted his comment, but the lawmakers remained dissatisfied.They demanded he step down the report entirely. Yielding to pressure, Rotimi conceded, saying: “I seek the leave of the Speaker and honourable members to step down the report.”The Tax Reform Bills have continued to attract heated debates across the nation.The controversy surrounding the tax bills followed a stiff opposition from stakeholders in the Northern part of the country.The journey to the now controversial bills began in July 2024 when President Tinubu inaugurated the Presidential Fiscal Policy and Tax Reform Committee, PFPTRC.The committee subsequently informed Nigerians of the move to replace the National Tax Policy with a more comprehensive “National Fiscal Policy on Fair Taxation, Responsible Borrowing and Sustainable Spending”.This birthed the four bills, including the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill. They are currently before both chambers of the National Assembly for passage.The major contention over the bills, among other things, is the sharing of the Value Added Tax (VAT) as proposed by the bills.The principle of sharing 60 per cent of VAT revenue through the derivation principle has continued to spark debates, with the northern elites leading the opposition.According to some of the northern stakeholders, the VAT arrangement would favour Lagos and a few other Southern states because they host many company headquarters.On Oct. 29 Northern Governors and traditional rulers from the region rejected the Tax Reform Bills.Following their stance, the National Economic Council, NEC, on November 1, during its 145th meeting in Abuja, advised the president to withdraw the bills.President Tinubu, however, insisted that the bills should be allowed to go through legislative processes.Despite the opposition, the Tax Reform Bills on Thursday last week passed second reading at the upper legislative chamber.Also, last week, the House of Representatives announced plans to hold a special session on the bills; however, it was suddenly cancelled without any explanation.

By David Torough, AbujaOffice of the Auditor General for the Federation (AuGF) may have concluded plans to commence a special audit of major revenue generating agencies of the federal government before the end of the year, DAILY ASSET has learnt.The agencies that will come under the first phase of the service -wide exercise include the Nigerian National Petroleum Company Limited (NNPC), Federal Inland Revenue Service (FIRS), Nigerian Ports Authority( NPA), Nigeria Maritime Security Administration Agency (NIMASA) and the Nigeria Customs Service (NCS).

Other revenue generation agencies, Special Fund agencies and major spending departments of the federal government will also fall in the second phase of the exercise.Ahead of commencement of the exercise, tension and anxiety has mounted in some of the organisations as management and operating officers are not sure of the extent of the audit and what the outcome would be.A highly placed source at the Audit House told DAILY ASSET that the audit exercise was no longer routine as it was linked with President Bola Tinubu’s Renewed Hope Agenda.The source explained that the Audit House was worried about the state of the nation’s s public finances, particularly as public expenditure was grossing highly above the nation’s revenues.In the 2024 budget for instance the source said N9.18trillion out of N32 trillion federal government budget was expected to be financed from borrowings.The source said the expected audit would focus on key areas of “performance, compliance and deployment of Information and Communication Technology”.”The intention of the Audit House is to submit the audited accounts as quickly as possible” the source explained, adding that the current leadership of the Audit House was against a situation whereby those indicated by previous audit exercises retired several years before the reports indicting them were submitted to the National Assembly for necessary action.In line with the new thinking, DAILY ASSET learnt that the Auditor General for the Federation, Shaakaa Kanyitor recently launched a strategic plan that covers 2024- 2028. Under the plan launched by Secretary to the Government of the Federation ( SGF) Senator George Akume about two Months ago, the Auditor General intends to deploy his personnel to cover about 1,023 agencies of the Federal government and about 103 diplomatic missions abroad.The AuGF was however, said to be grossly handicapped to carry out his ambitious project with an inadequate workforce of 1,400; shortage of office accommodation and slim budget of about N2bn in the 2024 Appropriations Act.Besides, the AuGF was said to be operating with an archaic law that was first enacted in 1956 and which has lost its relevance with current realities.Officials of AuGF would not speak on the matter when DAILY ASSET sought their views as they said their boss, Shaakaa Kanyitor was not available and didn’t permit them to speak to the press.