By Aaron Ossai
The House of Representatives has proposed a 20 per cent limit on investments in a single issuer as part of efforts to strengthen the management of trust funds and protect beneficiaries from financial losses.
The proposal is contained in the Trustee Investment Bill, 2026 (HB 2762), which seeks to repeal and re-enact the existing Trustee Investment Act of 1957 to reflect developments in Nigeria’s financial markets and introduce stronger safeguards against investment risks.
Chairman of the House Committee on Capital Market and Institutions, Solomon Bob, disclosed this on Monday during a public hearing on the bill at the National Assembly, Abuja.
Bob said the proposed investment cap under Clause 4 was designed to prevent excessive concentration of trust assets in one institution and reduce the risk of exposing entire portfolios to the financial difficulties of a single issuer.
He explained that the existing law, enacted in 1957, had become outdated, considering the significant transformation of Nigeria’s financial system and the emergence of new investment opportunities.
According to him, Nigeria’s capital market is now valued at over N80tn, while pension assets exceed N30tn, with investment options expanding to include Real Estate Investment Trusts, infrastructure funds and green bonds.
Under Clause 3, the proposed legislation seeks to expand permissible investment categories to include corporate bonds, equities, Exchange Traded Funds, real estate, infrastructure funds, and foreign investments through licensed custodians, private equity, regulated virtual assets and environmental, social and governance-compliant bonds.
Bob said the expanded investment options would enable trustees to diversify portfolios and potentially improve returns while operating within clearly defined regulatory safeguards.
The bill also seeks to strengthen trustees’ fiduciary responsibilities by introducing explicit obligations of loyalty, prudence, care and impartiality. It would permit trustees to delegate certain investment functions to professional fund managers and custodians while retaining responsibility for their supervision and performance.
Other provisions include fair valuation of trust assets, annual reporting to beneficiaries and a prohibition on speculative dealings, futures contracts and investments in unregulated schemes.
Speaking at the hearing, Speaker of the House, Tajudeen Abbas, represented by Dahiru Abubakar Sarki, said modernising the law was necessary to protect family wealth, inherited property and institutional assets.
He cautioned that the reform must balance investment flexibility with adequate protection, warning that excessive restrictions could deny beneficiaries reasonable returns, while weak regulation could expose their assets to avoidable losses.
Abbas added that a credible trustee investment framework could help mobilise long-term domestic capital for infrastructure development, enterprise growth and expansion of productive capacity.
However, Bob expressed disappointment over the poor attendance of invited institutions, disclosing that only three of the approximately 12 organisations invited attended the hearing.
The Securities and Exchange Commission, Debt Management Office and Association of Corporate Trustees were the only institutions represented.
The committee chairman said eight memoranda had been received ahead of the hearing and urged stakeholders to submit recommendations on the proposed investment limits, fiduciary obligations and safeguards for different categories of trust funds.
He assured Nigerians that the committee would consider all submissions objectively, stressing that protecting ordinary beneficiaries must remain central to the proposed legislation.
