The Board of Trustees of the Investors’ Protection Fund (IPF) of The Nigerian Stock Exchange (NSE) Wednesday announced that it would be compensating a total of 158 claimants with N42.2 million, for pecuniary losses suffered by them as a result of wrong doing by certain dealing member firms of The Exchange.
The IPF is a statutory fund established pursuant to Section 197 of the Investment and Securities Act 2007 (ISA) to compensate investors who suffer certain pecuniary losses.
The loss may arise from revocation or cancellation of the registration of a dealing member firm by the Securities and Exchange Commission (SEC); or from the insolvency, bankruptcy or negligence of a dealing member firm of The Exchange.
The loss may also be due to defalcation committed by a dealing member firm or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received or deemed received by the dealing member firm in the course of its business as a dealing member firm.
The NSE clarified that these 158 claimants due to be compensated are investors whose claims were verified by The Exchange, approved by the Board of Trustees of the IPF, and whose identities were verified by an identity verification consultant engaged by the IPF.
The claimants were found to be eligible for compensation in accordance with the relevant provisions of the ISA and the Investors’ Protection Fund Rules.
The Board of Trustees, in accordance with the Rules of the Fund set a maximum compensation amount of N400, 000 per claimant.
The total amount approved by the Board of Trustees as compensation payment to the 158 investors is N42,227,397. These 158 investors are being compensated for defalcation committed by 29 dealing member firms of The Exchange who are either inactive or have been expelled as members of The Exchange.
The Vice Chairperson of the Board of Trustees, Fubara Anga, said: “It has been a long, rigorous and transparent process getting to this stage.
We researched global best practices and based on our findings, we took decisions on various issues regarding the IPF, benchmarking our processes and procedures against other international investors’ protection funds.
First of all, we put in place an appropriate corporate governance structure for the Fund; we adopted Rules for the IPF and then following transparent and auditable selection processes. We appointed auditors as well as identity verification consultants. We then commenced the process of identifying claimants and verifying their claims. We must thank the claimants for their patience.”