The Securities and Exchange Commission, SEC, yesterday revealed that the N5 billion had been earmarked for its National Investor Protection Fund, NIPF, to compensate investors for pecuniary losses.
Mr Mounir Gwarzo, who the SEC Director General, disclosed this at a post media briefing at the end of the third quarter meeting of the Capital Market Committee,CMC, said the fund would be for losses arising from the insolvency, bankruptcy or negligence by non-broker/dealer capital market operators.
“This is a very excellent feat taken by the commission with its little resources as it has not been funded by the government,” he said adding that the NIPF was set-aside solely by SEC, but the whole market would contribute to the fund.
He said that the country had joined an elite group of a handful of countries with this kind of investor compensation scheme.
“While dozens of jurisdictions have functional investor protection funds run mainly by exchanges and their dealing members, Nigeria is now among only a few countries to have a National Investor Protection Fund,” Gwarzo said.
He said that the fund was established to strengthen investor confidence because investors were equally critical for financial system stability.
“This is why the protection of investors is a cardinal goal of securities regulators world-wide,” Gwarzo said disclosing further that the former board of the commission approved the establishment of the Fund and earmarked resources to serve as its take-off grant in 2011.
NIPF is a trust scheme established to compensate investors whose losses are not covered under the Investors Protection Funds being administered by Securities Exchanges and Capital Trade Points.

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