Custodian Agreement (Nigeria)
CUSTODIAN AGREEMENT
Companies and Allied Matters Act (CAMA) 2020 | Investment and Securities Act (ISA) 2007 | Stamp Duties Act (Cap. S8)
This Custodian Agreement ("Agreement") is made on [Agreement Date] between:
(1) [Principal Name] (RC: [Principal RC Number]), of [Principal Address] ("the Principal"); and
(2) [Custodian Name] (RC: [Custodian RC Number], Licence: [Custodian Licence Number]), of [Custodian Address] ("the Custodian").
1. ASSETS UNDER CUSTODY
1.1 The Principal hereby appoints the Custodian, and the Custodian hereby agrees, to hold and safeguard the following assets on behalf of the Principal: [Asset Description] ("the Assets"), with an estimated value of [Asset Value].
1.2 The Custodian shall hold the Assets separately from its own assets and from assets held for other clients. Segregation required: [Segregation Required].
1.3 The Custodian shall not use the Assets for its own purposes or pledge, mortgage, or otherwise encumber the Assets without the prior written consent of the Principal.
2. CUSTODIAN'S DUTIES
2.1 The Custodian shall: (a) hold the Assets safely and securely, applying the same standard of care as a prudent professional custodian exercising its skill and expertise; (b) keep accurate records of all Assets held, received, and disbursed; (c) collect and credit to the Principal all income (dividends, interest, and other distributions) arising from the Assets; (d) execute instructions given in writing by the Principal concerning the Assets; and (e) provide the Principal with [Reporting Frequency] statements of the Assets held, their current value, all transactions during the period, and any income received.
2.2 The Custodian shall not deal with the Assets except on the written instructions of the Principal or as expressly authorised by this Agreement.
3. FEES AND EXPENSES
3.1 The Principal shall pay the Custodian the following fee for custodian services: [Custodian Fee].
3.2 The Principal shall reimburse the Custodian for all reasonable expenses properly incurred in performing its custodian duties, including registration fees, transfer taxes, stamp duty, and out-of-pocket expenses, within 30 days of receipt of a detailed invoice.
4. TERM AND TERMINATION
4.1 This Agreement shall remain in force for [Custody Term].
4.2 Either party may terminate this Agreement by giving the other party 30 days' prior written notice. The Custodian shall promptly return all Assets to the Principal (or as directed by the Principal) on termination, after deducting any outstanding fees and expenses.
5. LIABILITY
5.1 The Custodian shall be liable for any loss of or damage to the Assets arising from the Custodian's fraud, negligence, or wilful default.
5.2 The Custodian shall not be liable for loss arising from events beyond its reasonable control, including acts of God, government actions, or market disruptions.
6. GOVERNING LAW AND DISPUTE RESOLUTION
6.1 This Agreement is governed by the laws of Nigeria. Subject to Clause 6.2, the courts of [Governing State] shall have jurisdiction.
6.2 Any dispute shall first be referred to senior representatives of both parties for resolution within 21 days, failing which either party may refer the matter to arbitration under the Arbitration and Conciliation Act (ACA) 2023.
Principal
________________
Signature
Custodian
________________
Signature
What Is a Custodian Agreement (Nigeria)?
A Custodian Agreement in Nigeria governs the relationship between the parties by fixing what each must do.
Custodian Agreements in Nigeria are used across diverse contexts: financial institutions acting as custodians of investment portfolios under SEC Rules and Regulations 2013; trustees holding property for beneficiaries under the Trustees Act (Cap. T22) Laws of the Federation of Nigeria 2004; escrow agents holding funds pending fulfilment of contractual conditions; document custodians in real property transactions; and corporate service providers safeguarding company records under CAMA 2020, Sections 375 to 390.
The legal enforceability of a Nigeria Custodian Agreement depends on the standard requirements of a valid contract: offer, acceptance, consideration, intention to create legal relations, and capacity of parties. Where the custodian is a licensed entity — such as a bank, stockbroker, or fund manager registered with the Central Bank of Nigeria (CBN) or SEC Nigeria — additional regulatory obligations apply, including capital adequacy requirements, segregation of client assets, and periodic reporting to the regulator.
A Custodian Agreement in Nigeria differs from a simple bailment arrangement because it includes active management obligations, reporting duties, fee structures, and liability provisions. Bailment under common law imposes only a duty of reasonable care; a custodian agreement creates a fiduciary or quasi-fiduciary relationship with higher standards of conduct, particularly where the custodian manages investment assets regulated under the ISA 2007 and SEC Rules.
Stamp duty on a Custodian Agreement in Nigeria is governed by the Stamp Duties Act (Cap. S8) Laws of the Federation, with the Federal Inland Revenue Service (FIRS) administering stamp duty on instruments relating to commercial transactions. The applicable rate depends on the nature and value of the assets under custody.
The legal framework governing the Custodian Agreement (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Custodian Agreement (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies and Allied Matters Act (CAMA) 2020 sets the foundational requirements.
When Do You Need a Custodian Agreement (Nigeria)?
A Nigeria Custodian Agreement is needed whenever one party entrusts assets, funds, securities, or documents to another party for safekeeping or management, and the arrangement requires legally enforceable terms beyond informal trust.
Financial institutions and fund managers licensed by SEC Nigeria require a formal Custodian Agreement when holding investment securities, mutual fund assets, or pension fund assets on behalf of clients. The Pension Reform Act 2014 and the National Pension Commission (PenCom) Regulations mandate that Pension Fund Custodians hold contributory pension assets separately from their own assets under a formal custodian arrangement.
Corporate entities involved in mergers, acquisitions, or joint ventures under CAMA 2020 require a Custodian Agreement when placing shares, documents of title, or transaction funds with an escrow agent or corporate trustee pending completion of the transaction.
Individuals transferring real property under the Land Use Act 1978 or commercial property agreements frequently require a custodian arrangement for title documents (Certificates of Occupancy, Deeds of Assignment) held by a solicitor or trust company pending completion of conditions precedent.
Non-governmental organisations and foundations holding grant funds or charitable assets on behalf of beneficiaries require a Custodian Agreement to define accountability obligations and comply with requirements under the Special Control Unit Against Money Laundering (SCUML) registration requirements for non-profit organisations.
Art collectors, family offices, and high-net-worth individuals storing physical assets — including artworks, valuables, and important documents — with professional custodians require a formal agreement defining liability, insurance requirements, and conditions for return of the assets.
Parties in Nigeria should prepare a Custodian Agreement (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Custodian Agreement (Nigeria)
A Nigeria Custodian Agreement must contain specific provisions to be legally effective and operationally enforceable.
Identification of parties must include full legal names, RC numbers (for companies registered under CAMA 2020 with the Corporate Affairs Commission (CAC)), registered addresses, and the capacity in which each party acts (individual, corporate, trustee, or regulated institution). Licensed custodians must state their licence number issued by SEC Nigeria or CBN as applicable.
Description of assets under custody must be precise — including asset type, quantity, value, identification numbers (for securities: ISIN codes; for real property: plot numbers and certificate of occupancy numbers; for documents: document reference numbers). Vague descriptions create disputes over scope of the custodian's obligations.
Custodian's duties and standard of care must be specified: whether the custodian owes a duty of reasonable care (common law standard) or a higher fiduciary duty. For regulated custodians under ISA 2007 and SEC Rules, segregation of client assets from the custodian's proprietary assets is mandatory and should be expressly stated.
Fee and compensation provisions must state the custodian's fee, payment frequency, and conditions for fee adjustment. Under Nigerian law, a custodian is entitled to compensation and indemnification for reasonable expenses incurred in performing custodian duties.
Reporting obligations should specify the frequency and format of statements to the Principal, covering asset valuations, income received, transactions executed, and any material changes to the assets.
Liability and indemnification provisions must define the custodian's liability for loss, damage, or misappropriation of assets, and exclude liability for events beyond reasonable control. For securities custodians, SEC Nigeria Rules impose specific liability standards.
Term and termination provisions must specify the agreement's duration and conditions for termination by either party, including notice periods, procedures for returning or transferring assets, and settlement of outstanding fees.
Governing law and dispute resolution should specify Nigerian law as the governing law and designate a Lagos State or Federal High Court as the court of jurisdiction, or provide for arbitration under the Arbitration and Conciliation Act (ACA) 2023 (which replaced the 1988 Act).
Additional compliance elements for a Custodian Agreement (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Custodian Agreement (Nigeria) (Nigeria) [Legal document template]. Forms Legal. https://forms-legal.com/nigeria/business/contracts/custodian-agreement-nigeria
"Custodian Agreement (Nigeria) (Nigeria)." Forms Legal, 2026, https://forms-legal.com/nigeria/business/contracts/custodian-agreement-nigeria.
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title = {Custodian Agreement (Nigeria) (Nigeria)},
year = {2026},
howpublished = {\url{https://forms-legal.com/nigeria/business/contracts/custodian-agreement-nigeria}},
note = {Free legal document template. Based on Companies and Allied Matters Act (CAMA) 2020}
}Frequently Asked Questions
A Custodian Agreement is legally binding in Nigeria provided it meets the standard requirements of a valid contract under Nigerian law: offer, acceptance, consideration, intention to create legal relations, and capacity of the parties to contract. Nigerian courts, applying common law principles of contract, consistently enforce custodian agreements where these elements are present and the agreement is clear in its terms. For regulated custodians — including those licensed by SEC Nigeria under the Investment and Securities Act (ISA) 2007 or by the Central Bank of Nigeria (CBN) — additional enforceability requirements apply, including compliance with the SEC Rules and Regulations 2013. A custodian agreement that violates regulatory requirements may be unenforceable as contrary to public policy. The agreement should be executed as a deed for maximum enforceability and stamped with the Federal Inland Revenue Service (FIRS) under the Stamp Duties Act to avoid challenges to admissibility in evidence in Nigerian courts.
A Custodian Agreement and a Trust Deed serve related but distinct functions in Nigeria. A Custodian Agreement primarily governs the safekeeping and administrative management of assets — the custodian holds the legal title to the assets temporarily or as nominee but does not acquire beneficial ownership. The custodian's obligations are contractual and typically commercially motivated. A Trust Deed, governed by the Trustees Act (Cap. T22) Laws of the Federation of Nigeria 2004, creates a full trust relationship in which the trustee holds legal title for the benefit of identified beneficiaries, with full fiduciary duties including the duty to act in the best interests of beneficiaries. Trust Deeds are commonly used in estate planning, pension fund arrangements, and charitable endowments. The key practical distinction is that a trust deed creates an enforceable equitable interest for beneficiaries that survives insolvency of the trustee, while a custodian's obligation is primarily contractual and ranks as a creditor claim in insolvency unless the assets are properly segregated under regulatory requirements.
A Custodian Agreement does not generally require registration as a public document in Nigeria. However, stamp duty must be paid to the Federal Inland Revenue Service (FIRS) under the Stamp Duties Act (Cap. S8) for the agreement to be admissible as evidence in Nigerian courts. Where the custodian holds real property documents (such as a Certificate of Occupancy or Deed of Assignment), the underlying property instrument must be registered at the relevant State Land Registry as required by the Land Use Act 1978 and the Land Registration Law applicable in the relevant state. For custodians regulated by SEC Nigeria — including Pension Fund Custodians under the Pension Reform Act 2014 and custodians of collective investment scheme assets — the custodianship arrangement must be disclosed to SEC Nigeria and PenCom as part of the relevant entity's regulatory filings.
Misappropriation of assets by a custodian in Nigeria exposes the custodian to both civil and criminal liability. Civilly, the Principal may bring an action for breach of contract, breach of fiduciary duty (where applicable), and conversion under the tort of conversion recognised by Nigerian courts. The Federal High Court or State High Court has jurisdiction depending on the nature of the assets and parties. Criminally, a custodian who misappropriates assets may face prosecution under the Criminal Code Act (Cap. C38) for stealing or criminal breach of trust, under the Economic and Financial Crimes Commission (EFCC) Act 2004 for financial crimes, or under the Advance Fee Fraud and Other Fraud Related Offences Act for fraud. Regulated custodians who misappropriate client assets face revocation of licence, fines, and prosecution under the ISA 2007 and SEC Rules. The EFCC, the Independent Corrupt Practices and Other Related Offences Commission (ICPC), and the Nigerian Financial Intelligence Unit (NFIU) have powers to investigate and prosecute financial crimes involving custodians.
Nigerian law does not mandate that a Custodian Agreement be drafted by a Legal Practitioner, but engaging a Legal Practitioner enrolled with the Nigerian Bar Association (NBA) is strongly recommended for agreements involving significant asset values or regulated custodians. The Legal Practitioners Act (Cap. L11) governs Legal Practitioners in Nigeria. For regulated custodianship arrangements — particularly for Pension Fund Custodians under PenCom Regulations, collective investment scheme custodians under SEC Rules, or custody arrangements for listed securities — the agreement must comply with specific regulatory requirements that benefit from specialist legal drafting. Even for private custodian arrangements, a Legal Practitioner can advise on stamp duty obligations, the correct execution formalities (whether as a simple contract or as a deed), and appropriate liability and indemnity provisions to protect the Principal's interests effectively.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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