From Benjamin A Ameh, Lagos
The Board of Trustees of the Investors’ Protection Fund (IPF or Fund) of The Nigerian Stock Exchange (The Exchange) today announced that it will, pursuant to Part XIV of the Investment and Securities Act 2007 (ISA), compensate a total of 158 claimants 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 ISA to compensate investors who suffer pecuniary loss arising from: The revocation or cancellation of the registration of a dealing member firm by the Securities and Exchange Commission (SEC); The insolvency, bankruptcy or negligence of a dealing member firm of The Exchange; and 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.
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 Rules).
The Board of Trustees, in accordance with the Rules of the Fund set a maximum compensation amount of N400,000.00 (Four Hundred Thousand Naira) per claimant. The total amount approved by the Board of Trustees as compensation payment to the 158 investors is N42,227,397 (Forty Two Million, Two Hundred and Twenty Seven Thousand, Three Hundred and Ninety Seven Naira). 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.
Fubara Anga, the Vice Chairperson of the Board of Trustees 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.”
The Chief Executive of the NSE, Oscar Onyema, who is also a Trustee of the IPF said: “This milestone gives me great pleasure as it affirms our commitment to the continuous development of initiatives that will bolster confidence in the capital market. Though the compensation payment may not be a complete restoration, it is a show of good faith on our part to investors. I thank the Board of Trustees for their guidance and commitment, the claimants for their valuable patience, and all other stakeholders for their contributions towards the success of this exercise.”
Ms. Tinuade Awe, the Head of Legal and Regulation at The Exchange and Acting Secretary to the Board of Trustees, explained that “the IPF will duly advise all 158 claimants about the processes to receive their compensation payments.”
