CAPITAL MARKET
House Seeks To Repeal And Re-enact Existing Trustee Investment Act
The House of Representatives Committee on Capital Market and Institutions has proposed a 20 per cent investment limit on exposure to a single issuer as part of efforts to strengthen the management of trust funds and protect beneficiaries from financial losses.
The proposal is contained in the Trustee Investment Bill, 2026 (HB 2762), which seeks to repeal and re-enact the existing Trustee Investment Act, with provisions expanding permissible investment opportunities while introducing stricter safeguards against excessive investment risks.
The Chairman of the Committee, Hon. Solomon T. Bob, disclosed during the public hearing on the bill at the National Assembly, Abuja, describing the proposed diversification requirement as a critical measure to prevent excessive concentration of trust assets in one investment.
Bob said the existing Trustee Investment Act, which dates back to 1957, was enacted when Nigeria’s financial system was considerably less developed and the country’s investment opportunities were limited.
He noted that the financial landscape had changed significantly, with Nigeria now having a capital market valued at over N80 trillion, pension assets exceeding N30 trillion and several emerging investment opportunities, including Real Estate Investment Trusts (REITs), infrastructure funds and green bonds.
“Today, we have a sophisticated capital market worth over N80 trillion, pension assets over N30 trillion, and new asset classes from REITs to Infrastructure Funds to Green Bonds. The world has moved. Our law has not. This hearing is to correct that,” he said.
According to him, the proposed legislation is designed to bring the legal framework governing trust investments in line with contemporary financial realities while ensuring that trustees operate within clearly defined investment and accountability standards.
Under Clause 3 of the proposed bill, the committee chairman said the investment universe would be expanded to accommodate corporate bonds, equities, collective investment schemes, including Exchange Traded Funds (ETFs) and REITs, infrastructure funds, real property, foreign investments through licensed custodians, private equity, regulated virtual assets and environmental, social and governance (ESG)-compliant bonds.
He explained that the proposed expansion would provide trustees with a wider range of investment opportunities, allowing them to diversify portfolios and potentially improve returns for beneficiaries.
However, Bob said the proposed 20 per cent limit on investment in a single issuer under Clause 4 was intended to minimise concentration risk and prevent the exposure of entire trust portfolios to the financial difficulties of one institution.
The bill also seeks to strengthen the fiduciary obligations of trustees through Clause 5 by expressly incorporating the principles of loyalty, prudence, care and impartiality.
Under the proposed provision, trustees would be required to exercise the same level of prudence expected of individuals managing their own financial affairs, while prioritising the interests of beneficiaries.
The committee chairman further disclosed that Clause 6 would allow trustees to delegate certain investment responsibilities to professionals, including fund managers and custodians, while retaining responsibility for their selection, supervision and performance.
He said the proposed arrangement was intended to accommodate the growing complexity of modern financial markets and enable trustees to benefit from specialised investment expertise without weakening accountability.
On transparency and accountability, Bob said Clauses 7 and 8 would introduce requirements for fair valuation of trust assets and annual reporting to beneficiaries.
He explained that the provisions were designed to address possible abuses and ensure that beneficiaries had access to information about the management and performance of assets held on their behalf.
The proposed legislation also seeks to prohibit speculative dealings, futures contracts and investments in unregulated schemes under Clause 10.
In addition, Clause 11 would empower the Minister of Finance, in consultation with the Securities and Exchange Commission (SEC) and other relevant regulatory authorities, to make regulations necessary for implementing the Act.
Bob said the provision would allow the legal framework to respond to emerging developments in the financial market without requiring the law to be repeatedly amended whenever new investment products emerge.
Explaining the importance of the public hearing, the committee chairman said the committee deliberately invited 12 key institutions whose activities involve the management, regulation and advocacy of trust assets.
The institutions included the Ministries of Justice and Finance, the Securities and Exchange Commission, the National Pension Commission, the Debt Management Office, the Nigeria Deposit Insurance Corporation, as well as representatives of financial market operators, estate administrators and civil society organisations.
