Section 164 Investments and Securities Act

Section 164 of the Investments and Securities Act 2025 is about Prohibition of certain transactions and profits. It is under Part XIII (Collective Investments Schemes) of the Act. It provides as follows:

(1) A company that is a manager under a scheme or is a subsidiary or holding company of the manager or a director or a person engaged in the management of such a company shall not carry out transactions for itself or himself, or make a profit for itself or himself from a transaction in any assets held under the scheme.

(2) A company that is a manager of a scheme constituted under a trust or is a subsidiary or holding company of the manager shall not —
(a) borrow money on behalf of the scheme for the purpose of acquiring securities or other property for the scheme save as provided for by the trust deed, articles of the company or partnership deed as is relevant for the investment activities of the scheme with consent of the trustees and approval of the Commission;

(b) lend money that is subject to the trusts of the scheme to a person to enable him to purchase units or participatory interest of the scheme;
(c) mortgage, charge or impose any other encumbrance on any securities or other property subject to the trust of the scheme save for securities lending
and borrowing; or
(d) engage in any transaction that is not in the interest of unit or participatory interest holders and of the scheme.

(3) A person who contravenes the provisions of this section, commits an offence and is liable upon conviction to a fine of not less than N5,000,000 or to imprisonment for a term of not less than three years or both.

(4) The Commission may, in lieu of prosecution under subsection (3), sanction a person who contravenes the provisions of this section by imposing a penalty of an amount that is equal to the profits made from any such transaction or an amount not less than N5,000,000 whichever is higher.