LCFE woos pension fund administrators
The Lagos Commodities and Futures Exchange has advocated the need for PENCOM to implement the relevant laws that made provision for Pension Fund Administrators (PFAs) to invest in the Commodities Ecosystem to accelerate the Nigerian economic development.
Specifically, the LCFE’s Managing Director, Mr Akin Akeredolu-Ale , who led a team of Registered Members of LCFE to PENCOM Office in Abuja recently, explained that LCFE had built a robust ecosystem where gold’s electronic receipts are traded.
“We have Gold and we will show a proof of concept today for the Gold Asset class.
“We have built a robust ecosystem we have commercial banks, retail banks and now non-interest banks. Non- interest is playing a big role in Sukuks and other forms of Non-Interest Financial instruments we expect that non-interest transaction advisers will be able to raise instruments that have commodities as underlying.
“We have Custodians who give comfort to the PFAs and instruments to know that your investments are secures, we have issuing houses that will develop financial instruments. We are all also behind the Securities and Exchange Commission as our regulator.
“Our prayer is that PENCOM will look into the Act that permits pension funds to invest in instruments listed a SEC regulated Exchange and see LCFE as one of those Exchanges where this investment can be made.
“Financial instruments listed on LCFE in any of the asset classes have gone through the process and have been de-risked to ensure that Pension Industry can participate.
“We want to reassure you that the re-inflation of Assets under management is going to benefit the people that have their pension in that space.
“Globally, the Pension Assets are used in stimulating economies participating in a risk-free environment.
“The major investment coming in for gas in Nigeria, are coming in from hedge funds outside Nigeria and they are coming in to invest in Commodities.
“We need to activate the biggest economy in Africa by making sure that part of our pension assets is used to activate this aspect of the economy,” said Akeredolu-Ale.
Corroborating him, the Executive Commissioner, Corporate Services, Securities and Exchange Commission (SEC), Mr Ibrahim Boyi, who represented the Director General, Lamido Yuguda, said one of the key areas of the Capital Market Master Plan of the Commission was the development of a sound commodity ecosystem.
“The Commission has been working with the Capital market master plan and one of the Key aspects of that Master plan is the development of the Commodities Ecosystem.
“The Commodities ecosystem is an opportunity to diversify, expand markets and create more products and we have made tremendous progress.
“LCFE is one of the success stories we have other commodity Exchanges approved by SEC and we have seen great developmental progress in the Commodity services.
“We have come up with rules to guide the ecosystem like the Warehousing and collateral management rules. We are working with Standard Organisation of Nigeria (SON) and other relevant stakeholders to ensure that the level of standard is maintained. I remember when they were developing the products for Gold.
“The standard they are operating in the market is of global standard.
“We are happy to support the endeavours of LCFE and the ecosystem. We are interested to see how we can expand the products.
“We are happy today we have witnessed a major achievement by LCFE and we are happy to continue to support them and ensure that they create the right environment and we will also create the rules that will ensure confidence in investor’s protection.
“I say congratulation to LCFE they have our support. Our focus remains market integrity, market depth and prosperity,” said Mr Anyim Nyerere, who represented the Director General, PENCOM, Mrs Aisha Umar assured LCFE of PENCOM’s readiness to support the utilisation of commodities ecosystem to enhance economic growth and development.
