The Association of Corporate Trustees (ACT) said the organization is well positioned to create a more robust capital market, building on the proper implementation of its fiduciary responsibility.
This was revealed during the 2022 business lunch hosted by the organization in Lagos State, tagged; “An Assessment of the Nigerian Trust Industry Against Global Trusteeship Trends.”
According to Mrs. Olufunke Aiyepola, Managing Director/CE, UTL Trust Management Services Limited and one of the panellists during the conversation, corporate trustees serve as third parties who assume will and monitor capital market transactions from the structuring phase until compliance. and monitoring.
She explained that the corporate trustee monitors and assesses the issuer’s ability to borrow and repay debt. In particular, the Trustee oversees the documentation in the Trust Deed. She also added that corporate trustees can improve market depth by embracing digitalization.
What other experts say
In the speech by the Director of the Registration, Exchange, Market Infrastructure and Innovation Department of the Securities and Exchange Commission, Mr. Abdulkadir Abbas, he explained that the SEC considers administrators to be the last man standing in a given transaction. He noted that there is a need to protect the integrity of the market, saying there are consequences for any fiduciary who fails to perform their duties as a fiduciary.
He, however, praised the performance of corporate directors in Nigeria, pointing out that 33 of the country’s 35 directors are active. He also felt that for a decade now, there have been no default issues for subnational bonds, except for a few cases in terms of corporate bonds.
On the other hand, Ms. Bolanle Adekoya, Partner at PwC, highlighted the major challenges facing the corporate fiduciary industry in Nigeria. Some of the notable challenges according to her include market volatility, cybersecurity and data protection risks, lack of market depth, conflicts of interest, use of assets for social impacts without breach of trust, as well as constant market, industry and regulatory development.
Meanwhile, Dr Bayo Olugbemi, Managing Director/CEO of First Registrars & Investors Services Limited, said the debt in the bond market is still very shallow and needs more investment opportunities. He noted that the tax exemption for sub-national bonds is not enough to deter the market because the pool in the first place is not enough.
Ms. Rukayat Sanusi, Permanent Secretary, Lagos State Debt Management Office, represented by Ms. Bolanle, also speaks on the impact of corporate trustees on the Nigerian capital market. She explained that the administrators made the market robust.
“The work of the Corporate Trustees has been instrumental in ensuring market adequacy. Although it should be noted that other capital market players have also done a good job of promoting transparency in the market,” she says.