SEC approves ‘marked to market” valuation for fixed income securities

The Securities and Exchange Commission (SEC) of Nigeria has approved a two-year transition period, starting September 22, 2025, for fund managers to fully adopt mark-to-market valuation of fixed income securities.

This means that instead of valuing bonds at their purchase price (amortized cost), managers will gradually shift to valuing them at their current market price, which reflects the true and up-to-date value of the assets.

As part of the transition, the SEC has also granted temporary forbearance on asset-allocation rules

• Normally, funds must keep a 70:30 split between mark-to-market and amortized cost, but for the next two years, managers can work with a more flexible 50:50 balance to ease the adjustment process.
• While this hybrid method is permitted, all new fixed income purchases must immediately be valued on a mark-to-market basis.

To ensure accountability, every fund manager is required to submit an implementation plan to the SEC by October 2, 2025, showing how they intend to achieve full compliance before the grace period ends.

In addition, the SEC will partner with FMAN and other stakeholders to carry out investor education programs so that the investing public understands the changes.