Lagos – The Securities and Exchange Commission (SEC) has approved the board of trustees of FMDQ OTC Securities Exchange N100 million Investor Protection Fund (IPF).
Ms Kaodi Ugoji, FMDQ Vice-President & Divisional Head, Strategy & Corporate Services, made the disclosure to the News Agency of Nigeria (NAN) on Wednesday in Lagos.
NAN reports that IPF is a SEC requirement for all exchanges operating in the country to offer financial protection to investors.
IPF was established to give investors a statutory backed avenue for reducing the losses they suffer as a result of bankruptcy.
It will also cover losses arising from insolvency, negligence or wrongdoing by dealing members.
Ugoji said that the commission had approved the fund’s board of trustees as submitted by FMDQ.
She said that the board of trustees would meet in the next couple of weeks to strengthen strategies for the implementation of the IPF.
“The board of trustees will meet and the next line of action is implementation,’’ Ugoji said.
She added that the third quarter target for the fund’s launch was still on course as all the bottlenecks that affected its initial take off had been cleared.
Ugoji said that 50 per cent fine collected from participants that erred in the market in 2015 would also go into the fund.
The fund, according to FMDQ vice-president, will act as a financial back up for investors to cover losses arising from wrongdoing or negligence by dealing members.
She added that the fund would be seeded by the members of the exchange to protect investors’ securities if anything goes wrong.
FMDQ OTC platform, inaugurated on Nov. 7, 2013, was licensed by the Securities and Exchange Commission (SEC) in 2012 to provide oversight on the OTC market in Nigeria.
FMDQ OTC is a securities exchange for listing and trading of fixed income products such as treasury bills, bonds and foreign exchange among others. (NAN)