The Nigerian Investor Protection Fund (IPF) compensates eligible investors who suffer losses from a dealing member's insolvency or default. This guide explains what the IPF covers, what it does not cover, and why direct CSCS share ownership matters independently.
The Nigerian Investor Protection Fund (IPF) is administered by the Nigerian Exchange Group and is designed to provide a backstop of compensation to investors who suffer financial losses as a result of the insolvency or financial default of a licensed NGX dealing member. Understanding what the IPF covers — and what it does not — helps investors take a fully informed approach to protecting their portfolios.
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The IPF is intended to compensate investors for losses arising directly from the financial default or insolvency of an NGX dealing member — for example, where a licensed broker misappropriates client cash held on account, or where a broker's failure results in financial loss to clients that cannot be recovered from the broker's own assets. The IPF provides compensation up to a defined maximum limit per claim. This limit is set by NGX and may be reviewed periodically — refer to the NGX website at ngxgroup.com for the current maximum.
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If a dealing member fails and you have suffered an eligible loss, you must submit a formal claim to the NGX. Claims require documentation — including evidence of your account, the transactions affected, and the loss sustained. The NGX reviews claims and makes determinations on eligibility and compensation amounts. Refer to ngxgroup.com for current claim procedures and required documentation.
The IPF is most relevant where a client has suffered a financial loss — typically involving cash balances or assets that have been misappropriated. For shares held directly in your name at CSCS, the position is fundamentally different: the CSCS record confirms you as the legal owner, and the shares are not part of the broker's estate. In this scenario, you may not need to claim against the IPF at all — because you still own your shares. The IPF and CSCS direct ownership are complementary protections, not alternatives.
If your shares are held in a nominee or pooled account in the broker's name, your claim in an insolvency is more complex — you may need to rely on the IPF and potentially insolvency proceedings to recover. This is one of the key practical reasons why direct CSCS ownership provides stronger protection than nominee structures. Always confirm how your shares are held before you invest.
Shares Saver holds all shares directly in each investor's own CSCS account — not in a pooled fund. This means your shares are registered in your name at the central depository, independently of Shares Saver's own balance sheet.
Important disclaimer
This article is for general information and educational purposes only. It does not constitute legal or financial advice. IPF terms, compensation limits, and claim procedures are set by the NGX and may change. Refer to ngxgroup.com for current IPF rules. This article does not guarantee any particular outcome in the event of broker failure. Shares Saver does not provide legal or financial advice.
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