Section 179 Investments and Securities Act

Section 179 of the Investments and Securities Act 2025 is about Duties of trustees or custodians. It is under Part XIII (Collective Investments Schemes) of the Act. It provides as follows:

(1) A trustee or custodian shall —
(a) ensure that the basis on which the sale, issue, repurchase or cancellation, as the case may be, of participatory interests effected by or on behalf of a scheme is carried out in accordance with this Act, and rules and regulations under this Act;

(b) ensure that the selling or repurchase price of participatory interests is calculated in accordance with the rules and regulations made under this Act, the trust deed or custodial agreement;

(c) verify that, in transactions involving the assets of a scheme, any consideration is remitted within time limits which are acceptable market practice in the context of a particular transaction;
(d) verify that the income accruals of a portfolio are applied in accordance with this Act and the trust deed or custodial agreement;

(e) inquire into and prepare a report on the administration of the scheme by the manager during each annual accounting period, in which it shall be stated whether the scheme has been administered in accordance with the provisions of this Act, the rules and regulations made under this Act, and the trust deed or custodial agreement;
(f) if the manager does not comply with the limitations and provisions referred to in paragraph (e), state the reason for the non-compliance and outline the steps taken by the manager to rectify the situation;

(g) send the report referred to in paragraph (e) to the Commission and to the manager to enable the manager include a copy of the report in its annual
report; and
(h) ensure that —
(i) there is a legal separation of assets held under custody and that the legal entitlement of investors to such assets is assured, and
(ii) appropriate internal control systems are maintained and that records clearly identify the nature and value of all assets under custody, the ownership of each asset and the place where documents of title pertaining to each asset are kept.

(2) A trustee or custodian shall report to the manager any irregularity or undesirable practice, concerning the collective investment scheme of which it is aware and if steps to rectify the irregularity or practice in question are not taken to the satisfaction of the trustee or custodian, it shall report such irregularity or undesirable practice to the Commission within the period prescribed in the rules and regulations made under this Act.

(3) The trustee or custodian shall satisfy himself that every income statement, balance sheet or other return prepared by the manager under section 166 of this Act, fairly represents the assets and liabilities, and the income and distribution of income, of every portfolio of the scheme administered by the manager.

(4) At the request of the trustee or custodian, every director or employee of the manager shall submit to the trustee or custodian any record, book or document or information relating to the administration by the manager of its collective investment scheme which is in its possession or at its disposal, and which the trustee or custodian may consider necessary to perform its functions.

(5) In addition to the duties contained in this section, the trustee or custodian shall discharge such other duties as may be prescribed in the rules and regulations made under this Act.

(6) A person shall not interfere with the performance by a trustee or custodian of its functions under this Act and rules and regulations made under this Act.

(7) A trustee or custodian of a scheme which fails to discharge any of its duties referred to in this section, is liable to a penalty of not less than N50,000,000 in the first instance and N50,000 for every day the violation continues.