Investors Protection Fund: NSE inaugurates new board of trustees

In what appears to be a major move at jettisoning the old board of the Investors Protection Fund (IPF), the management of the Nigerian Stock Exchange (NSE), on Friday, set up a new nine-man board of trustee for the fund in the market. The NSE had in November 1995, inaugu-rated a Board of Trustees for the IPF wherein it was expected to compensate investors for losses suffered not as a result of market mechanism. It was meant to complement the cover offered by Fidelity Guarantee Insurance maintained by each market operator.However, since its inception, it was unclear if any affected investor had benefited from compensation derived from the fund. According to opera-tors, the current status of the fund could only be revealed by authorities of The NSE.Further finding by the Nigerian Tribune showed that although the idea behind the Fund was commendable, its effectiveness as a tool for compensation was seriously in doubt. Speaking at the inauguration of the new board for IPF, the Chairman, Mr Gamaliel Onosode, affirmed that the members of the trustee would do all within their powers to better the lot of investors.Onosode noted that he would be relying substantially on the expertise and technical know-how of other members of the board to develop a market-wide and internationally acceptable guideline for the Fund.'We will not tolerate any unbecoming attitude from any dealing member firm,' he said.He observed that only investors whose brokerage firm suffered bankruptcy or an investor who, it was established was defrauded in the course of transaction would be entitled to protection from the Fund.'He allayed fear of possible interference from the council of the NSE, saying that the Fund and the Exchange must maintain an acceptable arms length relationship. 'When the first investors' protection fund was inaugurated, I was appointed the chairman, but the platform for successful operation was not created then. The lacuna that made the first one not to work will not be repeated or allowed this time,' he assured.Also speaking, the Chief Executive Officer, CEO, NSE, Mr Oscar Onyema, said that the Fund would be guided by utmost disclosure and transparency, adding that the board of trustees, would still have to work out some modalities on the workability of the Fund, including how many times either an individual or organisation could approach the Fund in one year for refund.
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