Stanbic IBTC Nominees Limited, has urged investors to take to custody investing as this enables speedy economic development and also ensures rapid market development.
Stanbic IBTC Nominees, the custody subsidiary of Stanbic IBTC Bank Plc, organised a forum recently to fast track the ease of building of a more healthy market for custody services in Nigeria and also to support economic growth.
The move, also expected to deepen development of the local capital market and enhance investor appetite for market securities in the country, not only would it boost market confidence, but would ensure knowledgeable investing for the investor.
Deputy Chief Executive, Stanbic IBTC Bank, Dr. Demola Sogunle, said the aim of the custody investment session was to examine contemporary issues in custody services and also to highlight the role of custodianship as a critical component in the capital market value chain. However, the level of awareness on how to harness the benefits of custodianship remains low in Nigeria.
“The need for excellent custody services in Nigeria remains strong. This is particularly driven by the impetus in cross-border investment activities, “Sogunle said “which we are well-positioned to provide. As the leading non-pension custodial firm in Nigeria, Stanbic IBTC provides a steady guide for clients in having the confidence that their assets under the custody of Stanbic IBTC are well-protected,”
He remarked that aligning Nigeria with the rest of the world in money market and fixed income securities was a major factor that led to the appointment of custodians by the Central Bank of Nigeria, adding that the adoption of international best practices will enhance transparency in money market operations in the country and cause an attendant lift in investors’ confidence, which will in turn enhance growth of the financial services industry. “Stanbic IBTC will continue to help financial services in Nigeria become even more sophisticated and robust to attract further investments into the country,” he added.
A custodian is a financial institution that holds clients’ securities for safekeeping in order to minimize the risk of their theft or loss. Among such clients’ assets include securities such as share certificates, bonds, stocks and treasury bills. Custody services are available to a wide portfolio of clients, including unit trust schemes, pension funds, corporate clients, high networth individuals, financial institutions, foreign, local and individual investors, insurance funds, fund managers, brokers, and dealers.
The session, which held in Lagos had in attendance local investors, fund managers, capital market players, regulators, policymakers, bankers and other stakeholders from the private and public sectors.
Executive Director, Capital Markets, Nigerian Stock Exchange, Mr. HarunaJalo-Waziri, emphasised that the capital market is an enabler of wealth creation, which is vital for sustainable economic growth. He highlighted several initiatives introduced by the Exchange to develop and deepen the Nigerian capital market.
Chief Executive, Stanbic IBTC Nominees Limited, Mr. Akeem Oyewale, said the imperative of placing assets under custodianship cannot be over-emphasized. It is in recognition of the vital role of custodians in protecting clients’ assets that regulators such as the Central Bank of Nigeria (CBN) have regulations that ensures that non-proprietary assets of banks are kept with duly licensed custodians, whilst the National Pension Commission (PenCom) also ensures that pension assets are kept with licensed Pension Fund Custodians (PFCs) in line with the Pension Reforms Act. The insurance industry regulator has also directed insurance assets to be kept with custodians. All these efforts are designed to protect investors’ funds and boost confidence in the system.
Oyewale said advances in technology have enabled custodians to expand product solutions well beyond their traditional roles of settlement and safekeeping to reporting on and monitoring fund investment portfolios, which is consistent with increasing demands on corporate governance, as well as the increased accountability expected of fund managers and/or trustees.