The Securities and Exchange Commission (SEC) has announced that it has commenced the implementation of 100% custody requirement in the Collective Investment Schemes sector.

SEC stated this in a press statement.

The Custody requirement covers all Funds and Portfolios being managed by registered Fund/ Portfolio Managers. So all Client’s assets managed under discretionary and non-discretionary mandates are to be held under independent Custodial agreement and Custodial Banks. This is in addition to CIS (Mutual Funds) authorized for public offering

Yuguda said although it is a natural operational requirement of CIS the SEC is having some new enforcement and insistence on the compliance that has been in the books but have not been implemented before now.

“I think with the introduction of total custody in that sector, we are likely to see a massive uptake of these kinds of products. We have released some regulations recently in this area for the different types of fund managers, and I think this is an area that is now becoming increasingly attractive to investors and is also receiving the attention of the commission”.

He said with the SEC having 100% custody agreement in the Collective Investment Schemes (CIS) sector, any investor that invests in the capital market should be confident that their investments are secure.

Written By Obioma Ezenwobodo Esq

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