BY CHARLES ABUEDE & CHISOM NWATU
The Association of Corporate Trustees (ACT) in Nigeria, in an effort to improve investor confidence and the sanctity of capital markets, has called for more active role-playing and strategy digitized to develop the industry and build trust.
The association, during the first edition of its annual business luncheon held in Lagos on Wednesday on the theme “An assessment of the Nigerian trust industry vis-à-vis global trends in trusteeship “, brought together various stakeholders and industry experts to chart a course for the growth of the industry, seeking ways to educate investors and stakeholders on the effectiveness and benefits of trust structures while encouraging discussions and initiatives that would strengthen the robustness of trust structures in Nigeria.
The event, which aligns with the association’s aim of fostering cohesion among its members while promoting synergies within the Nigerian capital market community, also featured a panel discussion titled “Investor Protection : the indispensable role of corporate trustees”, with hundreds of trust experts, capital market operators and finance professionals in attendance, providing a good platform for professionals to network and unlock information and more in-depth industry information.
Lamido Yuguda, Chief Executive of the Securities and Exchange Commission (SEC), in his presentation, called on trustees and trust companies to be more dedicated and focused on delivering their services efficiently to build investor confidence in the capital markets.
Further, Olufunke Aiyepola, Managing Director of UTL Trust Management Services Limited, speaking on the role of corporate trustees, said it was imperative to have state corporate trustees in restructuring while by performing due diligence on the client.
“You need to be sure that the issuer is a safe sovereign or sub-sovereign in the issuance. identify the associated risk on the ability to borrow and pay,” explained Aiyepola.
She added that in mutual funds and collection systems, the corporate fiduciary must ensure that fund managers pay dividends when due and ensure that the correct financial statements are published, adding “Well, you should know that trustees are assessors of risk, advice and regulatory compliance.
Bayo Olugbemi, Managing Director, First Registrars and Investors Services, said: “The debt market has benefited from tax exemption as an incentive for 10 years and despite the policy of removing the tax exemption on the debt instrument nationally, the pool is not enough because there are unlimited investment opportunities; however, the financial crises of 2007, 2008 and 2009 made all stakeholders complicit. For best practice, there should be advocacy for changing tax laws to allow national and sub-national issues or securities to be exempt from tax.
Leo Okafor, Corporate Secretary and General Counsel, United Capital Plc, said serving and attracting the younger generation to the market by identifying the need to invest in a trust fund can be done through digitization and product deployment. funds tailored to their needs. . He said that the guardianship deals with the protection of investors and that it affects all segments of the capital market.
Additionally, Misan Kofi-Senaya, CEO of DataMax Registrars Limited, spoke about the fees involved and the need for incentives to properly capture and engage more domestic players and investors, not just institutions.
Abdulkadir Abbas, Director, Registration, Exchanges, Market Infrastructure and Innovation, SEC, said there was a huge responsibility and liability on the trustee.
“The major issue is not with the SEC, but with the sanctity of the market and administrators should be allowed to play their part. In 10-11 years, there have been no defaults on the debt market; 33 trustees are active of the 35 SEC-recognized trustees and follow regulatory guidelines.
“Fintech or technological advancements are now at a rapid stage and when we talk about issuing bonds via blockchain and fiduciaries, working with regulators, it can become a trend, because digitalization will allow ideas to be evaluated of fintech, then setting goals to accommodate ideas. To me, you can’t continue in the traditional way of doing these services just to accommodate millennials,” he said.
Regarding breaches on investor protection funds, Abbas said there had been payments from the national investor protection fund which is overseen by the SEC to help maintain confidence in the market. “Although, no exact figure on how much, the enforcement division is responsible for that for your access,” he said.
Earlier in his guest presentation, Bolanle Adekoya, Partner at PwC, spoke about protecting investors in the capital market. “The capital market has been rocked by scandals of unrecognized companies and the activities of errant market participants which have led to a lack of transparency, the absence of custodian and third-party trustees, the importation of independent rating for dealers.
“Trustees have a fiduciary responsibility and an essential role in representing the assets of a trust. They must be able to manage and administer the trust in accordance with its terms and intentions; monitor investment performance; assist in the filing of claims and the collection of proceeds from life insurance policies, among other functions,” she said.
According to Adekoya, there is a need to start from the ground up and offer the best services to business trust clients as a corporate trustee despite challenges such as market volatility; cybersecurity and data protection risks; lack of market depth; management of conflicts of interest; the use of assets for social impact and the constant market, industry and regulatory developments facing the corporate fiduciary.