The director-general of the Securities Exchange Commission (SEC), Mr Gwarzo Mounir said the sum of N5 billion has been earmarked for its National Investor Protection Fund (NIPF) to compensate investors for pecuniary losses.
Gwarzo disclosed this at a media briefing at the end of the third quarter meeting of the Capital Market Committee (CMC) over the weekend.
He said that the fund would be for losses arising from the insolvency, bankruptcy or negligence by non-broker/dealer capital market operators.
NIPF is a trust scheme established to compensate investors whose losses are not covered under the Investors Protection Funds being administered by Securities Exchanges and Capital Trade Points.
According to him, the N5 billion has been set aside as a seed capital to jump start the recently launched National Investor Protection Fund (NIPF), with the maximum pay out set as N200, 000.
He noted that since the 2008 financial crisis in which the Nigerian stock market lost about 70 per cent of its value, investor confidence was eroded, while the apathy still impacts the state of the market.
This, coupled with the prevailing macroeconomic environment, he said, has been a major impediment to market recovery.
“The SEC which has a dual mandate of regulating and developing the capital market has put in place several reform measures to restore investor confidence and attract investors back to the market.
“ Today we are here to commemorate the culmination of one of those initiatives,” he added
Also, the Commission launched the corporate governance score card for public companies to help the regulators assess observance of codes and standards of best practices, investors make informed decisions, companies and banks analyse gaps and shortcomings of their corporate governance practices against national standards, and business associations evaluate governance practices of their members and help improve governance among their membership.
Speaking also, the head of department Financial Standard and Corporate Governance, Mr Edward Okolo said, adequate trainings on how the score cards will be completed has been held with all company’s secretaries prior to the launch especially since its implementation is compulsory.
Another initiative embarked by the SEC to complement the effort of the government in terms of developing the economy is the focus on the access of capital by Small Medium Enterprises (SMEs).
According to Gwarzo, the SME’s are the major engine of economy growth and employment generation.
Hence the need to encourage more SME’s to be listed in the market through the relaxation of requirements and granting of tax waivers or cuts to listed companies.
Source : Leadership