FMDQ Launches Investor Protection Fund to Compensate Investors

Goddy Egene

FMDQ OTC Securities Exchange (FMDQ) has formally established its Investor Protection Fund (IPF) in compliance with the provisions of Part XIV of the Investments and Securities Act 2007.

FMDQ said in a statement yesterday that the launch of the IPF and inauguration of its Board of Trustees (BoT) is a significant milestone in the achievement of the OTC exchange’s mandate to provide a secure and credible platform supported by global best practices, and serves as a catalyst for sustaining investor confidence in the Nigerian financial markets.

According to the exchange, the FMDQ-IPF was established for the purpose of compensating investors who suffer pecuniary losses arising from insolvency, bankruptcy, or negligence of a Dealing Member (DM) of the OTC Exchange, as well as defalcation committed by a DM or any of its directors, officers, employees, or representatives in relation to securities, money or any property entrusted to, received, or deemed received by the dealing member in the course of its capital market activities.

FMDQ said that at its interactive meeting, the members of the BoT of the fund deliberated on its leadership and other modalities towards the successful achievement of the mandate of the fund.

“Mrs. Titi Helen Lawani representing the Pension Fund Operators Association of Nigeria and Ms. Tokunbo Ajayi, representing the Association of Corporate Trustees emerged as Chairperson and Vice Chairperson, respectively, following a unanimous resolution that both, being representatives of the investors and trustees, respectively, possess the requisite experience to provide the necessary leadership to ensure that the fund is adequately governed and that the best interests of the investors are appropriately protected,” FMDQ said.

It added that other members of the BoT are: “Mr. Chuka Eseka serving as a person of proven integrity, knowledgeable in capital market matters; Mr. Adedapo Olagunju, representing the Financial Markets Dealers Association; Mr. Joe Mekiliuwa, representing the Central Securities Clearing System Plc; Mr. Amos Azi, representing the Securities and Exchange Commission; Chief Anthony Idigbe, SAN, representing the Capital Market Solicitors Association; Mrs. Taiwo Sonola, representing the Association of Assets Custodian of Nigeria; and Mr. Bola Onadele. Koko, representing FMDQ.”

FMDQ, explained that through the collaborative efforts of its management and the BoT of the fund, is committed to its mandate to drive transparency, governance, market oversight, credibility and ultimately to preserve the integrity of the Nigerian capital markets.

“Through this landmark achievement, the OTC Exchange is positioned to support the investor protection mandate of the SEC, which guided by the 10-year Nigerian Capital Market Master Plan, launched the National Investor Protection Fund (NIPF) in 2015 for the purpose of compensating investors whose losses are not covered under the Investor Protection Fund administered by securities exchanges.