The board of the Securities and Exchange Commission (SEC) Tuesday released the exposure draft of proposed rules on national Investor Protection Fund.
In furtherance of the commission’s mandate to regulate and develop the Nigerian capital market and in particular, its duty to ensure the protection of investors in the capital market, the board of the Securities and Exchange Commission approved the establishment of a nationwide fund known as the National Investor Protection
Fund.
The proposed rule specifies that the maximum amount payable to an investor who has suffered loss shall be N200,000 or its equivalent in form of shares/units, adding that “provided that where the amount of loss is lesser, the investor shall be paid the calculated amount of loss.
The amount of compensation may be reviewed from time to time as approved by the Board of the Fund. The Fund is not under any obligation to pay compensation to an investor.”
According to the SEC, the Fund shall be managed by the board of directors or such Fund Manager as may be appointed by the Board. Every decision taken by the board in the course of administration of the Fund shall be in accordance with the provisions of these Rules.
Beneficiaries of the Fund are investors who suffer pecuniary loss arising from: the insolvency, bankruptcy or negligence of a Capital Market Operator; and defalcation committed by a capital market operator 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 capital market operator in the course of its business as a capital market operator
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
