Section 168 Investments and Securities Act

Section 168 of the Investments and Securities Act 2025 is about Investment of a scheme fund. It is under Part XIII (Collective Investments Schemes) of the Act. It provides as follows:

(1) A scheme fund shall be invested by a manager in accordance with the provisions of the trust deed, custodial agreement or partnership agreement and other governing legal instruments with the objectives of safety and maintenance of fair returns on amounts invested.

(2) Subject to guidelines issued by the Commission, the funds and assets of a scheme shall be invested in any of the following —
(a) bonds, SUKUK, bills and other securities issued, sponsored or guaranteed by the Federal Government, government-sponsored or owned agencies, and the Central Bank of Nigeria;

(b) securities of sub-nationals and supranationals;
(c) bonds, SUKUK, redeemable preference shares and other debt instruments issued by corporate entities, where such securities are listed, noted or traded or to be traded on a recognised exchange or platform and registered under this Act;
(d) ordinary shares of public limited companies listed or traded on a securities exchange and registered under this Act with good track records;

(e) created indices comprising basket of securities, commodities or derivatives listed or traded or to be traded on a recognised exchange or platform;
(f) money market instruments, bank deposits and securities of issuers that have been rated by rating agencies registered by the Commission;

(g) securities of an authorised closed-ended investment scheme, whether or not listed on a securities exchange and registered under this Act;
(h) units of an open-end investment schemes registered by the Commission;
(i) real estate investment, private debt registered with the Commission, commodities and derivatives traded on a securities exchange;

(j) securities listed or traded on a regulated exchange in a jurisdiction which is a member of the International Organisation of Securities Commissions, provided that investments in foreign securities shall not exceed 20% of the assets under management or such percentage as may be prescribed by the Commission;

(k) equity and debt securities of private companies, small and medium enterprises, infrastructure projects, infrastructure companies, real estate investment projects, real estate investment companies, or other alternative asset classes as specified in the rules and regulations made under this Act, provided that such scheme shall be strictly restricted to qualified investors as a specialised or alternative investment scheme; or

(l) such other instruments as the Commission may prescribe.

(3) A manager may invest the funds and assets of a scheme fund in units of any investment funds:
Provided that such investment fund may only be invested in the categories of investments set out in subsection (2) and in real estate.

(4) The Commission may, by regulation, impose additional restrictions on investments by a manager with the objects of protecting the interest of a scheme or its beneficiaries.

(5) For the purpose of complying with any guideline set by the Commission as to the quality of financial instruments, debt securities, and issuers that scheme assets may be invested in, and to ensure the safety of scheme assets in general, a manager shall have due regard to the risk rating of instruments and issuers that has been undertaken by a rating company registered under this Act.