…pegs value of indemnity at N200,000
The Securities and Exchange Commission (SEC) has set aside N5 billion as seed capital to start the National Investors Protection Fund (NIPF) to compensate investors who may suffer financial losses in the course of their transactions in the capital market.
Such losses may be due to insolvency, bankruptcy or negligence of a capital market operators (CMO) and defalcation committed by a CMO or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, received from or deemed received by the capital market operator in the course of its business.
The NIPF, according the 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, as a scheme being promoted by the SEC to compensate investors that suffer losses, will compensate investors whose losses are not covered under the IPFs administered by Securities Exchanges and Capital Trade Points.