Saturday,November 20, 2021 / 08:40 AM / by National Pension Commission / HeaderImage Credit: National Pension Commission

The Commission's attention has been drawn to severalpublications in the media alleging breach of its Regulation on investment ofpension fund assets by Leadway Pensure Ltd, a licensed Pension FundAdministrator (PFA), in the equities of FBN Holdings Plc. The Commissioncategorically states that the allegations are NOT correct and must have beenmade based on the lack of understanding of the Investment Regulation issued by theCommission.

For the avoidance of doubt, the Commission wishes toclarify as follows:

1. The equity investments in FBN Holdings made byLeadway Pensure Ltd on behalf of the pension funds under its management are inthe name of the pension fund and belong to the RSA holders.

2. Therefore, the equity investments in FBN HoldingsPlc as stated in (1) above, cannot be appropriated or classified asshareholdings of any related party to the PFA.

3. Leadway Pensure Ltd is not in breach of theInvestment Regulation by investing pension funds in the equities of FBN HoldingPlc.

4. Records which can be confirmed from the Securitiesand Exchange Commission show that the equity investments in FBN Holdings Plcare in the name of the Pension Fund on behalf of the RSA holders.

5. For further clarification please note that:

a.Pension fund assets are managed by licensed PFAs and held in custody by PensionFund Custodians (PFCs) on behalf of Retirement Savings Account holders andother beneficiaries of the Contributory Pension scheme (CPS), in line with theprovisions of the Pension Reform Act 2014 (PRA 2014).

b.Section 69 (b) of PRA 2014 stipulates that the PFA and PFC shall takereasonable care that the management or custody of the pension funds is carriedout in the best interest of the retirement savings account holders. Therefore,all investments made by licensed PFAs in eligible securities and corporateentities are "ring-fenced" and belong to the RSA holders and other pensionbeneficiaries. Accordingly, these pension assets cannot be appropriateddirectly or indirectly to any individual or related party of the PFA.

c.The provisions of Section 6.1(iii) of the Investment Regulation dealing withconflict of interest, stipulate that "The PFA or any of its agents areprohibited from investing Pension Fund Assets in the shares or any othersecurities, issued through public or private placement arrangements, by relatedparty/person of any shareholder of the PFA". Related persons/party as definedin Section 1.10 of the Investment Regulation "includes natural persons relatedby blood, adoption or marriage; legal entities one of which has control orsignificant influence over the other, or both of which are controlled by someother person or entity; a corporate entity where any of the aforementionedholds 5% or more beneficial interest; and any other relationship that can bereasonably construed as related persons or parties".

6. In view of the foregoing, the Commission reiteratesthat there was no breach of its Investment Regulation whatsoever and invitesthe general public to be guided accordingly.

7. The Commission restates its commitment tofulfilling its regulatory and supervisory functions as well as ensuring thesafety of pension assets and the soundness of the Pension Industry.

PDF -100 Days After CBN's Board Removal: First Bank's Shaky House of Cards Report(PDF)

1.         Executive Summary: 100 Days After CBN's Board Removal: First Bank's ShakyHouse of Cards -  September 19, 2021

2.        Full Report: 100 Days After CBN's Board Removal: First Bank's Shaky House ofCards  -  September 19, 2021

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