TRUSTEE INVESTMENTS ACT

An Act governs the types of investments trustees can make for trust funds to ensure prudent management. It applies to trustees, estate administrators, fund managers, and beneficiaries. The goal is to protect assets and generate safe returns for beneficiaries.

What Is This Policy?

An Act governing the categories of investments that trustees of trust funds may make, ensuring trust assets are invested prudently to preserve capital and generate appropriate returns for beneficiaries.

Who Does It Target?

Trustees of private and public trusts Estate administrators and executors Trust companies and fund managers Beneficiaries of trust arrangements

What Does It Aim to Achieve?

Protect trust beneficiaries by restricting trustees to prudent, authorised investment categories and ensuring trust assets are not placed in speculative or inappropriate investments.

Key Features

Authorised Investments: Lists specific categories of investments trustees may make including Federal Government securities, fixed deposits, and approved equities. Diversification: Requires trustees to diversify trust investments to reduce concentration risk. Prudent Person Standard: Trustees must apply the standard of care of a prudent person in managing trust assets. Investment Review: Trustees must periodically review the trust portfolio and adjust as needed.

Current Status

Rollout Stage: Active Coverage: All trust arrangements in Nigeria Beneficiaries: Trust beneficiaries; fiduciary system integrity Funding: Trust assets

How to Access

Trustees must verify that each investment falls within authorised categories Trustees must maintain records of investment decisions and rationale Beneficiaries may apply to court if trustees make unauthorised investments Application method: Trustees implement through their investment management process; disputes filed at High Court.

Important Terms

Investment outside authorised categories makes the trustee personally liable for any loss The Act does not prevent trustees from investing more conservatively than required Courts may authorise deviation from the Act in specific circumstances

Official Resources

Website: https://www.justice.gov.ng Contact: Federal Ministry of Justice

Legal Framework

Enacted under Section 4 of the 1999 Constitution. Operates alongside the Trustee Investments Act Cap T19 LFN 2004, the Companies and Allied Matters Act 2020, the Investments and Securities Act 2007, and the Pension Reform Act 2014 for trustee investment standards.