The Pension Reform Act of 2014 allows Pension Fund Administrators (PFA’s) to invest funds in companies listed in the Nigerian Stock Exchange or any registered exchange . However the regulator, Pension Commission stipulates conditions for which this can occur.

Here is a list of conditions that Publicly listed companies must comply with before they are listed on the floor of the Nigerian Stock Exchange;

They are as follows;

  • The issuing companies’ shares are listed/quoted on a securities exchange registered by SEC. This means the shares must be listed on an exchange registered by the Security and Exchange Commission (SEC). In Nigeria, the Nigerian Stock Exchange and the National Association of Security Dealers (NASD) are the only two registered stock exchanges currently in operation in Nigeria. It means PFA’s can inly invest in shares listed in both exchanges. PFA cannot invest for example, in the Ghanaian Stock Exchange.  
  • The public limited liability company has an operating track record of having made taxable profits for, at least, three out of the five years preceding the investment, and paid dividends or issued bonus shares for at least one year within the five years. This means that companies that do not pay dividends at all in 5 years will not attract investments from Pension Funds. Companies that are perpetually loss making will also not qualify for pension funds to invest in them.

This conditions are pointers to investors (especially long term) identifying stocks that they should avoid if they track pension funds investments as a guide for where to put their money. Investors track Pension Fund Indexes because of the liquidity they bring when they invest in such companies. It is believed that a Pension Fund will only invest in sound companies with good corporate governance.

This regulation can be found in Section 5.24 of the Regulation of the Investment of Pension Fund Assets 


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