The Nigerian Securities and Exchange Commission (SEC) has approved a rule requiring fund managers to adopt a mark-to-market valuation method for fixed income securities, phasing out the traditional amortised cost approach over a two-year transition starting today.
Under the new directive, fund managers are granted temporary forbearance on existing asset-allocation rules. During the transition, they may use a hybrid valuation method—initially permitting a 50:50 balance between mark-to-market and amortised cost for fixed income assets. All new purchases of fixed income instruments must be immediately valued using the market value method.
To ensure compliance, the SEC requires every fund manager to submit an implementation plan by October 2, 2025. The plan must demonstrate how they will meet full mark-to-market valuation compliance by the end of the two-year period. Meanwhile, the Commission will work with the Financial Market Dealers Association (FMAN) and other stakeholders to educate investors about the changes.
