The Securities and Exchange Commission (SEC), has leveraged further investors’ confidence and mitigation of losses on the nation’s bourse with the inauguration of a National Investors Protection Fund (NIPF).
The quasi investors’ insurance scheme worth, N5 billion, would serve as a buffer for compensating investors for pecuniary losses, liquidation, insolvency, bankruptcy or negligence of non-broker/dealer capital market operators.
SEC’s NIPF will compliment the subsisting 10-year-old Nigerian Stock Exchange (NSE) Investors’ Protection Fund (IPF).
NSE had earlier in 2014 repackaged IPF to meet the demands of the character of the nation’s capital market in line with the Investment and Securities Act 2007.
NSE’s IPF composite contributory fund by dealing members, worth more than N695 million focus on compensating investors’ with genuine claims of pecuniary loss against stockbrokers whoes operating licenses were revocked or cancelled, insolvency or bankruptcy.
The others included defalcation committed by a stockbroking firm or any of its staff in relation to securities, money or any property entrusted to or received or deemed received by the firm in the course of its business.Mounir Gwarzo, SEC’s Director-General, said after the recent third quarter Capital Market Committee (CMC) meetings in Lagos, that the global financial challenges makes the new NIPF imperative in the nation’s capital.