The National Pension Commission has lifted its suspension on investment in commercial papers by licensed pension fund administrators .investments on commercial papers due to an unestablished regulatory framework by the Securities Exchange Commission .
The PenCom had warned the LPFAs to desist from investing in the affected portfolio pending the provision of guidelines on the issuance of commercial papers by the SEC.by corporations to finance inventory, accounts payable, payroll, and other short-term liabilities.
“PenCom has noted that SEC has developed draft rules and an amendment to rule 8 to regulate the issuance of Commercial Papers by its regulated entities.“Accordingly, SEC is addressing PenCom’s concern about the role of non- bank IPAs in Commercial Paper transactions by bringing them within regulatory boundaries.
“Consequently, to facilitate capital raising and ensure continued market stability, PenCom has lifted the restriction on LPFAs investing in commercial papers where capital market operators act as IPAs.” The commission said LPFAs must ensure that appropriate legal and financial due diligence are undertaken on all prospectus and offer documents of all commercial papers prior to investment “as stipulated in Section 2.9 of the Regulation on Investment of Pension Fund Assets”.