10 hours ago
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Barley two months after the National Pension Commission (PenCom) suspended investment in commercial papers by al Licensed Pension Fund administrators (LPFAs), the commission has reviewed its stance by lifting the embargo.
PenCom, in a statement on Tuesdaysaid it has noted that the Securities and Exchange Commission (SEC) has developed draft rules and amendment of rules 8 (Exemptions) to regulate the issuance of commercial papers by its regulated entities.
It further stated that given the development, it has lifted the restriction on LPFAs investing in commercial papers where capital market operators act as Issuing and Paying Agents (IPAs).
The statement read: “The National Pension Commission (PenCom) refers to its circular of 23 October 2024 on the above subject, in which it directed all Licensed Pension Fund Administrators (LPFAs) to immediately suspend further investment in commercial papers where capital market operators (non-banks) are engaged as Issuing and Paying Agents (IPAs) due to the absence of rules governing the issuance.
“PenCom has noted that SEC has developed draft rules and an amendment to rule 8 (Exemptions) to regulate the issuance of Commercial Papers by its regulated entities.
“Accordingly, SEC is addressing PenCom’s concern about the role of nonbank IPAs in Commercial Paper transactions by bringing them within regulatory boundaries.
“Consequently, to facilitate capital raising and ensure continued market stability, PenCom has lifted the restriction on LPFAs investing in commercial papers where capital market operators act as IPAs.
PenCom, however, warned that LPFAs must ensure that appropriate legal and financial due diligence are 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.
