The House of Representatives has begun moves to repeal and re-enact Nigeria’s 69-year-old Trustee Investment Act to expand investment opportunities for trustees and strengthen safeguards for beneficiaries.
The proposed reform seeks to replace the existing legislation, enacted in 1957, with a modern framework that accommodates emerging financial instruments while establishing clearer obligations for trustees managing assets on behalf of others.
The Trustee Investment Act (Repeal and Enactment) Bill, 2026, was scrutinised on Monday at a public hearing organised by the House Committee on Capital Market and Institutions in Abuja.
The hearing brought together lawmakers, regulators and other stakeholders to examine the proposed legislation and its implications for Nigeria’s investment landscape.
Declaring the hearing open, the Speaker of the House of Representatives, Tajudeen Abbas, said the existing law had become increasingly inadequate after decades of changes in the country’s economic structure, financial markets and investment opportunities.
Represented by Dahiru Sarki, Abbas said the reform was particularly important because trustee investment involved protecting assets belonging to individuals, families and institutions whose interests depended on responsible financial management.
He said, “The law governing the investment of trust funds carries a responsibility that extends beyond financial management. It concerns the protection of property, the preservation of family wealth and the security of those whose interests depend on the prudent management of assets entrusted to others.
“Behind every trust may be the inheritance of a child, the security of a widow, the resources of a charitable institution or the accumulated wealth of a family. The law must ensure that these interests are adequately protected.
“Nigeria’s Trustee Investments Act of 1957 was enacted in a substantially different economic and financial environment. Capital markets have expanded, financial instruments have become more sophisticated, and new opportunities for investment and wealth creation have emerged. Yet the legal framework governing trust investments has not kept pace with these developments. This makes reform both necessary and timely.”
The Speaker said the proposed legislation must strike a balance between protecting trust assets and allowing trustees sufficient flexibility to pursue reasonable investment returns.
He warned that an overly restrictive framework could deny beneficiaries legitimate opportunities for wealth creation, while inadequate regulation could expose their assets to poor investment decisions and unnecessary risks.
“A modern law must accommodate changing investment realities without weakening the fiduciary obligations of trustees. HB. 2762 seeks to achieve this balance by replacing an outdated framework with a more comprehensive regime for the investment of trust funds.
“Its proposed expansion of permissible investment opportunities reflects the realities of contemporary finance and the need for greater diversification. However, expanded investment freedom must be matched by strong safeguards, clear fiduciary responsibilities, effective risk management and appropriate regulatory oversight,” he said.
Abbas cautioned that modernising the legislation must not create room for speculative investment practices or undermine trustees’ responsibilities.
“Their decisions must therefore be guided by prudence, integrity, transparency and an overriding commitment to the interests of beneficiaries. Modernisation must never become a licence for speculation or a justification for exposing trust property to unreasonable risks.
“The national significance of this reform is equally important. Nigeria needs substantial long-term capital to address its infrastructure deficit, expand productive capacity and stimulate enterprise,” he added.
He urged stakeholders to contribute meaningfully to the legislative process, particularly on permissible investment categories, diversification requirements, fiduciary responsibilities, professional delegation, regulatory oversight and safeguards for beneficiaries.
The Speaker maintained that the success of the proposed legislation should be measured not only by the investment opportunities it creates but also by its ability to inspire confidence, protect entrusted assets and deliver lasting value to beneficiaries.
“The objective should be legislation that is not merely contemporary in its outlook but practical, enforceable and capable of standing the test of time,” he said.
Earlier, the Chairman of the House Committee on Capital Market and Institutions, Solomon Bob, described the existing legislation as outdated, arguing that it no longer reflected the depth and sophistication of Nigeria’s financial market.
“The world has moved but the Nigerian law has not,” Bob declared.
He explained that the Trustee Investment Act, now cited as Cap T22, Laws of the Federation of Nigeria 2004, was enacted when investment opportunities available to trustees were considerably more limited than those in today’s financial market.
According to him, Nigeria now has a capital market valued at over ₦80 trillion, pension assets exceeding ₦30 trillion and a growing range of investment instruments, including Real Estate Investment Trusts, infrastructure funds and green bonds.
“Today, we gather to review a law that has governed trust investments in Nigeria since 1957 – 69 years ago. The Trustee Investment Act, Cap T22, LFN 2004, was made when Nigeria had only Federal Government bonds. Today, we have a sophisticated capital market worth over N80 trillion, pension assets over N30 trillion, and new asset classes from REITs to Infrastructure Funds to Green Bonds. This hearing is to correct that,” he said.
Bob outlined the major provisions of the proposed legislation, explaining that the bill seeks to widen the range of investments available to trustees while establishing safeguards against excessive exposure and irresponsible management of trust funds.
Under Clause 3, the bill proposes expanding permissible investment categories to include corporate bonds, equities, exchange-traded funds, REITs, infrastructure funds, real property and foreign investments through licensed custodians.
Other proposed investment categories include private equity, regulated virtual assets and environmental, social and governance-compliant bonds, reflecting the growing diversity of instruments in contemporary financial markets.
To address concentration risks, Clause 4 introduces diversification requirements, including a proposed 20 per cent limit on investments in a single issuer.
The provision is intended to prevent trustees from committing excessive portions of trust assets to a single investment and exposing beneficiaries to disproportionate losses.
Clause 5 seeks to codify trustees’ fiduciary duties of loyalty, prudence, care and impartiality, requiring them to exercise sound judgment and prioritise beneficiaries’ interests when managing entrusted assets.
The bill also recognises the role of professional investment management.
Under Clause 6, trustees would be permitted to delegate certain functions to fund managers, custodians and other professionals, while retaining responsibility for their selection, appointment and supervision.
Clauses 7 and 8 seek to strengthen transparency through fair valuation requirements and annual reporting obligations to beneficiaries, while Clause 10 proposes restrictions on speculative transactions, futures contracts and investments in unregulated schemes.
Clause 11 empowers the Minister of Finance, in consultation with the Securities and Exchange Commission and other relevant regulatory authorities, to make regulations necessary to implement the proposed law and accommodate developments in the financial market.
Bob said the committee had invited 12 key institutions to participate in the hearing because of their respective responsibilities in managing, regulating or advocating for trust assets.
He assured stakeholders that the committee would conduct a transparent and thorough review, stressing that the protection of beneficiaries, irrespective of the size of their investments, would remain central to its consideration.
“I assure you this Committee will be fair, transparent and thorough. No interest is too small. The widow in Sokoto whose husband left N2 million in trust deserves the same protection as billion-naira pension fund,” he said.
The public hearing also featured contributions from the Securities and Exchange Commission, the Debt Management Office and other stakeholders, who offered perspectives on the proposed reforms and their implications for the financial sector.
Trust investment laws generally prescribe the conditions under which trustees may invest assets held for beneficiaries, including the degree of risk they may assume and the duties they owe those whose interests they represent.
Nigeria’s framework, first enacted in 1957, has remained in place despite the emergence of a more diverse financial market and investment instruments that were unavailable when the law was introduced.
The proposed repeal and re-enactment is therefore intended to address the gap between the existing legal framework and the realities of modern investment management.
While the inclusion of emerging asset classes could provide trustees with greater opportunities for portfolio diversification and improved returns, the proposed fiduciary, valuation and reporting requirements are designed to ensure that such flexibility does not come at the expense of beneficiaries.
The committee’s consideration of the bill will be significant in determining how Nigeria balances investment innovation, responsible asset management and the protection of wealth held in trust.