FAQs

What are the investor protection mechanisms that are available in the capital markets?

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One of the objectives of SECZ is to provide high levels of investor protection; as such SECZ has put in place various investor protection mechanisms which include:

  1. Regulation of all capital market players and activities – through licensing of capital market players, SECZ knows and monitors the activities of each and every market player and flushes out unscrupulous players. Continuous supervision of capital market players ensures that only strong institutions that uphold high ethical standards are allowed to operate.
  2. Establishment of an independent Investor Protection Fund – SECZ facilitated the establishment of the Investor Protection Fund that is meant to provide an additional layer of protection for investors and offer some reimbursement for losses suffered as a direct result of a licensed player becoming insolvent.
  3. Existence of a Guarantee Fund – The guarantee Fund that is administered by the Securities Exchange is meant to guard against settlement failures by the members of the exchange (i.e. securities dealers).
  4. Professional Indemnity cover – All capital market players are mandated to have this insurance cover to cover against losses resulting from negligent or dishonesty of any of the staff of the licensed player.