THE Securities and Exchange Commission (SEC) has announced the official take-off of the National Investors Protection Fund (NIPF) and conclusion of arrangement to compensate a total of 580 investors whose claims have been successfully verified.
According to the Commission, the verification was conducted by the Verification Committee of NIPF over complaints lodged against Mega Asset Managers Limited by the complainants.
The NIPF is a scheme being promoted by the SEC to compensate investors that suffer losses due to the insolvency, bankruptcy or negligence of a capital market operator, CMO.
The NIPF, according to a set of rules approved by the SEC’s board earlier in the year, will apply only to defalcations by insolvent or bankrupt capital market operators that are not dealing members of any Securities Exchange or Capital Trade Points.
Accordingly, the NIPF will be for the purpose of compensating investors whose losses are not covered under the NIPF administered by SEC and Capital Trade Points.
In a notice on its website, the Commission noted that appropriate compensations have been approved by the Verification Committee for the affected investors.
The notice reads: “Following the inauguration of the National Investor Protection Fund (NIPF) on 26th November, 2015, the Securities and Exchange Commission wishes to inform the general public of the official takeoff of the Fund.
“The Verification Committee of the NIPF has concluded a rigorous verification of investors’ claims against Mega Asset Managers Limited and subsequently recommended approval of appropriate compensation to the affected investors.
“Consequently, the Board of the NIPF at its sitting of 14th December, 2015 approved payment of compensation to the complainants/investors of Mega Asset Managers Limited who appeared before the Commission’s Administrative Proceedings Committee (APC) in the matter.”
It would be recalled that following the launch of the NIPF last month, the Commission said it has set aside N5 billion for compensation of investors who suffer pecuniary losses in the course of their transaction in the capital market.
In his address at the post-Capital Market Committee (CMC) meeting with journalists, the Director General, SEC, Mr. Mounir Gwarzo, informed that the first set of beneficiaries would be compensated from the Fund before the end of the year. He stated that compensation has been pegged at N200,000 (two hundred thousand naira) per complaint, adding that the NIPF covers the entire capital market and is broader in scope than a similar Fund being promoted by the Nigerian Stock Exchange, NSE, which seeks to provide respite to investors who suffer losses as a result of defalcation by dealing member firms of the Exchange.
He noted that the SEC taxed itself to provide the initial grant, while operators in the market are expected to make annual contribution to the Fund subsequently.