LOCAL LOANS (REGISTERED STOCK AND SECURITIES) ACT
Act · Governance
An Act establishes the legal framework for issuing and managing government bonds and securities as tools for domestic borrowing. It targets federal and state governments as issuers, along with investors and financial institutions like banks. This enables governments to raise long-term funds through the capital market.
LOCAL LOANS (REGISTERED STOCK AND SECURITIES) ACT
What Is This Policy?
An Act providing the legal framework for the issuance, registration, and management of government bonds and stock as instruments of domestic borrowing by the Federal and State Governments. Constitution of the Federal Republic of Nigeria 1999; Finance (Control and Management) Act; Debt Management Office Act; Central Bank of Nigeria Act; Fiscal Responsibility Act 2007; Investment and Securities Act
Federal and state governments as issuers Institutional and retail bond investors CBN and DMO as fiscal agents Banks and primary dealers in government securities
Who Does It Target?
The Federal Government as the issuer of government bonds and registered stock. Banks, insurance companies, pension funds, and individual investors purchasing government securities. The Debt Management Office (DMO) and the Central Bank of Nigeria managing public debt. Secondary market participants trading government bonds.
What Does It Aim to Achieve?
Establish the legal basis for government bond markets in Nigeria, enabling government to raise long-term domestic financing through the capital market.
Key Features
Bond Issuance: Authorises the government to issue registered stock (bonds) with defined coupon and maturity terms. Register of Stock: A register of all government stock holders must be maintained by CBN/DMO. Transfer Mechanism: Provides for the transfer of registered government stock between holders. Redemption: Government is obligated to redeem stock at par value on the specified maturity date.
Current Status
Rollout Stage: Active Coverage: Federal and state government bond markets Beneficiaries: Investors; government financing; capital market development Funding: Bond proceeds
How to Access
Purchase FGN bonds through CBN primary dealers or the DMO retail platform Transfers registered through CBN/DMO bond registry Application method: Buy FGN bonds at https://www.dmo.gov.ng
Important Terms
FGN bonds carry the full faith and credit of the government Coupon payments are made semi-annually on registered stock Defaulting on registered stock would constitute sovereign default
Official Resources
Website: https://www.dmo.gov.ng Contact: Debt Management Office (DMO)
Legal Framework
Constitution of the Federal Republic of Nigeria 1999; Finance (Control and Management) Act; Debt Management Office Act; Central Bank of Nigeria Act; Fiscal Responsibility Act 2007; Investment and Securities Act