BACKGROUND
The Investor Protection Fund (Fund or IPF) is a creation of the Securities and Exchange Commission of Zimbabwe (SECZim) and was established in 2010, initially in terms of Section 4(1)(a) of the original Securities Act [Chapter 24:25] read with Clause 8 of the 1st Schedule and Clause 2 of Part II of the 2nd Schedule of Statutory Instrument (S.I) 100 of 2010. At inception the Fund was under the management of a Board of Trustees and was entirely under the purview of SECZim until the 30th of August 2013 when the Securities Amendment Act (Number 2) of 2013 became law establishing the Fund as a separate legal entity managed by a Board of Directors (Board).
Sections 86B and 86C of the Securities Amendment Act (Number 2) of 2013 established the Fund and the Board, respectively.
PURPOSE OF THE FUND
The purpose of the Fund is to provide compensation to protected investors for losses suffered as a direct result of a licensed contributor to the Fund being unable to meet their liabilities through insolvency, malpractice or other cause.
According to S.I 83 of 2017, which sets out the Rules of the Fund, protected investor means:
- a holder of a security which is dealt with by a contributor; or
- a person for whom a contributor holds a security; or
- a person who has a right, whether vested or contingent, to obtain a security from a participating firm.
GOVERNANCE
The management of the Fund is vested in the Board of Directors, appointed by SECZim.
Main functions of the Board include:
- Administering the Fund.
- Levying contributions from contributors.
- Evaluating and paying claims made by protected investors and acting with impartiality in respect of all claims presented to the Board.
- Ensuring that the investing public is aware of the Fund, its benefits and any changes in regulations.
For the Board to execute its mandate properly the following committees were established:
- Risk Committee
- Audit Committee
- Finance Committee
The Board and its committees meet at least once quarterly to deliberate on the business of the Fund.
Administrative Structure:
The Fund does not have a fulltime secretariat and as such all services necessary for the smooth running of the Fund are outsourced. The investments of the Fund are under the management of two asset managers namely, Old Mutual Investment Group (OMIG) and Invesci Asset Management (IAM). Intellego Investment Consultants monitor the work of the asset managers to ensure they adhere to prescribed policies. The assets of the Fund are registered in the name of the Fund and are kept at Stanbic Custodial Services. Accounting, administration and secretarial services of the Fund are provided by Minerva Benefits Consulting. Other Fund Officers include Nolands Harare Chartered Accountants and PKF Chartered Accountants who provide external and internal audit services, respectively.
