Shareholders seek more enlightenment on Investors Protection Fund

on   /   in Finance 12:05 am   /   Comments

By NKIRUKA NNOROM

Shareholders in the Nigerian capital market have called on the Nigerian Stock Exchange, NSE, to take steps to educate investors on how to benefit from recently inaugurated Investors’ Protection Fund, IPF.

Some of the representatives of shareholders’ group, who applauded the management of the NSE over the idea, said that without adequate enlightenment, enough demand may not be made on the Fund when the need arises, which may affect its effectiveness.

Mr Augustine Anono, Chairman, Nigeria Professional Shareholders Association, said, “Nigerian Stock Exchange must set out modalities on how investors can benefit from the Fund. They have to state this categorically. Investors are still in the middle about the Fund.

There is need to organise various fora to educate the public. A lot of the retail investors are not aware of it.” He expressed fears that there could be possible diversion of the Fund, arguing that people who actually need it might not get it if it is not properly managed. “So, there should be thorough screening for those seeking that kind of Fund”, he said

He explained that the initiative was borne out of the need to re-energise investors to return to the capital market after the bitter experience they had during the global melt down a few years ago.

Speaking in the same vein, Chief Timothy Adesiyan, President, Nigerian Shareholders Solidarity Association, NSSA, urged the Nigerian Stock Exchange to ensure that there is full disclosure on the Fund, saying that what impeded the functionality of the first IPF established by the NSE was lack of disclosure.

He said,  “The Fund is not just being set up for the first time. I remember in 2007, in a seminar organised by Nigeria Institute of Bankers and Securities and Exchange Commission, SEC, this issue came up and a representative of World Bank at the seminar confirmed that the Fund was in existence, including Investors’ Training Fund, but we don’t know anything about their utilisation.

“The first thing is non-disclosure of material facts, this is because people who knew about the existence of the Fund the initial time it was established did not want people who could benefit from it to know that such fund was existing. Thus, there was no demand on the Fund due to ignorance. So, this time around, we want it to be announced to the whole world that this Fund is there and the criteria for benefiting from the Fund should be spelt out as well.”

“Many investors lost their investments and there was no assistance given to them by the regulatory authorities and this is the purpose of this kind of Fund; that when an investor is cheated by some unscrupulous stockbrokers participating in the stock market, they should be reimbursed from the Fund.” Now that the issue is coming up again, I strongly appeal that it should be properly utilized,” he added.

Agreeing with the others,Sir Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria, ISAN, appealed to the NSE to ensure that the Fund is put to full use.

He insisted that stockbrokers that cause investors to lose money out of sheer recklessness should be made to pay for it. “When any stockbroker causes investors to lose money on their investments for his or her own personal interest, then you can hold the stock exchange responsible for not having grip of such situation, but when the money is lost due to natural swing in the market for one reason or the other, you don’t hold anybody responsible for that. Even the stock exchange does not have an answer for such occurrences.

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