The Nigerian Stock Ex
change (NSE) has compensated 23 investors with N7.2 million under its Investors Protection Fund (IPF).
Mr Oscar Onyema, NSE Chief Executive Officer, Mr. Oscar Onyema said this on Monday at IPF news conference held in Lagos.
The Tide gathered reports that IPF is a quasi capital market insurance scheme inaugurated in 2012 for defalcation committed by NSE registered dealing member firms.
IPF was also designed to compensate investors loses occasioned by bankruptcy, insolvency, negligence or wrongdoing of stock-broking firms and to boost investors confidence in the nation’s course.
The fund addresses defalcation committed by a dealing member firms directors, officers, employees or representatives in relation to securities, money or any property in the course of its business as a dealing member firm.
Onyema said that the investors had been paid after completing their indemnity form in line with the fund’s requirement.
He said that 154 claimants were approved by the IPF board to be compensated with N40.63 million, noting that only 23 investors had been paid after completing the payment process.
Onyema said that the remaining 131 claimants would be compensated upon the completion of the indemnity form.
He said that the net asset value of the fund as of Aug. 17 was N872 million, adding that the board would continue to map out strategies aimed at growing the fund.
Onyema, who is also a member of the IPF, described the development as a milestone and restated NSE’s commitment toward initiatives that would bolster confidence in the nation’s capital market.
The Vice Chairperson of the Board of Trustees, Mr. Fubara Anga said “it has been a long, rigorous and transparent process getting to this stage”.
Anga said that the fund was in line with global best practices, noting that decisions, processes and procedures were bench-marked against other international investors protection funds.
He said that maximum amount payable to each claimant was N400,000 as approved by the board in accordance with the rules of the fund.
Anga said that the board would in future introduce a risk based insurance product for dealing members to be paying premium to grow the fund and increase the maximum amount payable to investors.
He said that the investors were 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’’.
He also said that the fund’s establishment followed appropriate corporate governance structure, transparent and auditable selection processes.
Anga said that claimants to be compensated were investors whose claims had been verified by the exchange and approved by the Board of Trustees of the IPF.
He said that it also included those that their identities were verified by an identity verification consultant engaged by the IPF.
He said that the claimants were found to be eligible for compensation in accordance with the relevant provisions of the ISA and the IPF rules.