National Pension Commission (PenCom) has granted regulatory forbearance to Pension Fund Administrators (PFAs) to invest pension fund assets in the proposed Initial Public Offering (IPO) of Dangote Petroleum Refinery & Petrochemicals FZE.
The approval was contained in a circular issued by the commission and addressed to all licensed pension fund operators.
The circular was signed by the Director of the Surveillance Department at PenCom, Abdulrahman Saleem.
It stated that the directive took immediate effect.
According to the commission, it carefully evaluated the strategic investment opportunity and the economic impact of the proposed IPO on the pension industry and the wider economy.
PenCom said the decision followed a review of a request for special dispensation to allow PFAs to invest pension fund assets in the refinery’s public offering.
The commission said it considered the strategic importance of the refinery, its strong fundamentals, growth potential and the economic benefits expected from the investment.
It added that it also took into account the track record of Dangote Industries Ltd., the majority shareholder in the refinery company.
According to PenCom, the approval involves granting a special dispensation from Section 6.2.7.1 (iii) of the Revised Regulation on Investment of Pension Fund Assets.
The waiver, it said, covers requirements relating to existence, profitability and dividend history, while other regulatory safeguards remain in force.
PenCom, however, directed PFAs to ensure that all investments made under the dispensation comply with their internal investment policies, risk management frameworks and fiduciary responsibilities to contributors and retirees.
The commission emphasised that the regulatory forbearance was exceptional, one-off and strictly limited to the IPO of Dangote Petroleum Refinery & Petrochemicals FZE.
It noted that the approval should not be regarded as an automatic precedent for future IPOs or other investment transactions.
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