The Nigerian Stock Exchange (NSE) says it has compensated 17 investors who suffered pecuniary losses in the course of transactions with N6.39 million in 2017 under its Investors Protection Fund (IPF) initiative.
The information is in a data posted on NSE’s website on Wednesday.
According to NSE, the 17 investors are those who suffered from revocation or deregistration of a dealing member firm by Securities and Exchange Commission (SEC).
A dealing member firm can be deregistered due to its insolvency, bankruptcy or negligence.
The IPF also compensates for defalcation committed by a dealing member firm or any of its officers 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 firm.
The IPF is a statutory fund established under the Investment and Securities Act 2007 (ISA) to protect investors who suffer flaws.
NSE said fewer number of claimants were compensated in 2017 compared with the 59 investors compensated with a total of N18.92 million in 2016.
It explained that fewer number of claimants compensated in 2017 was because most claimants failed to fulfill the preconditions for payment of compensation.
It stated that such preconditions included executing the indemnity and subrogation agreement in favour of the IPF.
The exchange noted that a total of 885 investors’ claims were referred to the IPF between 2015 and 2017, adding that 659 out of the 885 claims had been successfully verified, while 226 claims were pending.
It added that a total of 179 claimants were compensated between 2015 and 2017, while 250 investors abandoned their claims.
It stated that the abandoned claims had been referred by the IPF Board of Trustees (BOT) to Datapro Limited for identity verification of claimants.
Datapro Ltd is a consultant company engaged by the IPF for identity verification of claimants.
It said that abandoned claims could be reopened if the claimant came forward within six years from the date the BOT approved the abandoned claims.