The Nigerian Stock Exchange (NSE) has paid compensation to 49 investors that suffered monetary losses, in line with the market’s commitment to investors’ protection.
The Chief Executive Officer of NSE Oscar Onyema said this at a virtual session with stakeholders yesterday in Lagos. He was briefing them on the activities of the market in 2020. Onyema explained that the money was paid to investors who filed in claims for pecuniary losses.
He said a total of N17.02 million was paid to 49 investors who suffered pecuniary losses in 2020 while the Exchange also facilitated restitution and recoveries of shares worth N305.11 million for investors in the year under review.
The NSE had in 2012 inaugurated its Investors’ Protection Fund (IPF), in line with the provisions of the Investment and Securities Act (ISA). Part XIV of the ISA requires the Exchange to establish and maintain an investors’ protection fund to compensate investors with genuine claims of pecuniary loss against dealing member firms resulting from insolvency, bankruptcy or negligence of a dealing member firm of a securities exchange or capital trade points; and defalcation committed by a dealing member firm or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received by the dealing member firm during its business as a capital market operator.
In 2019, the NSE recovered about N1.44 billion worth of shares for investors under its investor protection mandate, including restitution of investors who were unjustly dispossessed of their shares.
Onyema had said the recoveries and restitution were in line with the strategic focus of the NSE on investor protection adding that the Exchange would continue to empower and protect investors through education, adequate surveillance and stringent enforcement of rules and regulations.
The NSE operates many channels for dispute adjudication and resolution, including its complaint management framework, disciplinary committee, subsisting working relationship with law enforcement agencies, especially the Economic and Financial Crimes Commission (EFCC) and a stand-alone IPF.
In December 2018, the NSE strengthened the governance of its IPF with a new framework that outlines a broad-based board and competencies. It had in 2012 inaugurated its IPF, in line with the provisions of the Investment and Securities Act (ISA).