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Audit delays dispensation of Investors Protection Fund — NSE

By BusinessNews Staff on August 3, 2014

The Nigerian Stock Exchange, NSE, has said that the delay in commencement of dispensation of the Investors Protection Fund, IPF, constituted two years ago, was due to an ongoing audit of the Fund.

Mrs. Tinuade Awe, Head, Legal and Regulation Division, NSE, made the disclosure at the investors’ clinic for journalists, organised by the Exchange in conjunction with FBN Capital, the investment arm of FBN Holdings Plc.

The Board of IPF was constituted in 2012 to address complaints arising from investments on the Nigerian Stock Exchange and to compensate investors who by no fault of theirs suffered loses in the course of their transactions on the Exchange where necessary.

The Fund, which had an initial take-off fund of N635 million, will also take care of investors that suffered, loses due to insolvency of any capital market operator.

In January, 2014, the Securities and Exchange Commission, SEC, approved a set of rules that would govern the operation of the Fund, but six months after, the Fund is yet to take off.

Awe explained that already, KPMG, a global accounting and auditing firm has been contracted for the purpose and would soon be through with the task.

“We know that investors are expecting activity from the Fund, but the Fund cannot start paying claims until after the auditing. In fact, it will be irresponsible of any exchange to pay claims from such Fund without an audit, especially when such an audit has not taken place before.

“It will also be responsible of the Exchange to conduct an audit to ascertain the state of the Fund before dispensation. We can assure you that very soon, payment will commence,” she said.

She assured that retail investors were well represented on the Board, adding that the rules were clearly spelt out by the SEC.

She further stated that the NSE is constantly benchmarking itself with other stock exchanges around the world and is also collaborating with other international organisations in order to continually upgrade its standard.

She stated that the NSE belongs to International Organisation of Securities Commission, IOSCO, and is working together with West Africa Market Integration (WACMI) for integration of African exchanges.

She observed that membership of IOSCO, for instance, has helped it in strengthening its knowledge base on market infringements and how best to manager the scourge.

Speaking on the theme of the programme, “Investor Protection in the Nigerian Capital Market: The Role of Journalists”, the Chief Executive Officer of the NSE, Mr. Oscar Onyema, noted that aside understanding capital market products as individual investors, the programme was intended to aid the appreciation of basic investment principles, as well as deepen journalists’ understanding of the capital market cycle and trends.

According to him, the training would also help in restoring confidence in the Nigerian capital market through dissemination of information about investor protection, and highlighting the important role of journalism in improving financial literacy in Nigeria.

[Vanguard]

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