The Investor Protection Fund (IPF) will for the first time offer insurance coverage to investors to hedge against non-commercial risks arising from the activities of companies listed on the Egyptian Exchange (EGX), according to Mr Mohamed Omran, executive chairperson of the Financial Regulatory Authority (FRA). This move follows a reorganisation of the IPF.
Mr Omran said the insurance will cover financial loss and will also extend to risks of bankruptcy and default by the fund’s members. Default cases are identified by a decision issued by the IPF’s board, reported Daily News Egypt.
Other risks include negligence or fraud on the part of a fund member, their legal representative, management, or employees, whether by themselves or in association with others, based on the results of investigations conducted by the FRA or other judicial or regulatory authorities.
Mr Omran said that the insurance coverage would be up to EGP500,000 ($30,700) per client.
He added that the fund is not obliged to compensate for any financial losses resulting from a change in the value of the client’s securities and market financial instruments or resulting from missing investment opportunities by member companies.