The National Pension Commission (PenCom) has lifted its temporary suspension on Licensed Pension Fund Administrators (LPFAs) investing in commercial papers issued by non-bank capital market operators. The restriction, imposed in October 2024, arose from the absence of clear regulatory guidelines for such investments. PenCom’s decision follows the development of draft rules and amendments by the Securities and Exchange Commission (SEC) to regulate the issuance of commercial papers.
According to PenCom, the SEC’s new draft rules address concerns over the role of non-bank Issuing and Paying Agents (IPAs), bringing them within a more defined regulatory framework. This development has prompted PenCom to allow LPFAs to resume investing in commercial papers involving capital market operators acting as IPAs, aiming to bolster capital raising and market stability.
Despite lifting the ban, PenCom emphasized the importance of due diligence, requiring LPFAs to thoroughly review all legal and financial documents of commercial papers before committing funds. This directive aligns with the Regulation on Investment of Pension Fund Assets to safeguard investors and ensure compliance with legal standards.
