If InvestNaija or another investment platform shuts down, would I get refunded only 5M despite investing 20M in an MMF? I want to confirm.
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If InvestNaija or another investment platform shuts down, would I get refunded only 5M despite investing 20M in an MMF? I want to confirm.
No if your ₦20 million is genuinely invested in a SEC-regulated Money Market Fund (MMF), it is not correct to say that you would automatically receive only ₦5 million if the investment platform shuts down. The important distinction is between the investment platform and the actual MMF/fund assets. HRead more
No if your ₦20 million is genuinely invested in a SEC-regulated Money Market Fund (MMF), it is not correct to say that you would automatically receive only ₦5 million if the investment platform shuts down.
See lessThe important distinction is between the investment platform and the actual MMF/fund assets.
How it normally works
If you invest ₦20 million through a platform such as InvestNaija, and the money is actually invested in a properly constituted and SEC-registered MMF:
Your ₦20m represents units/interests in the fund, not a deposit with the app.
The fund’s assets should be held separately through the fund’s custodian/trustee arrangements.
SEC’s guidance specifically identifies asset segregation and independent custodial arrangements as important investor protections. �
SEC Nigeria
Therefore, if the platform/agent fails, that does not automatically mean your ₦20m disappears or that you are limited to ₦5m.
The fund assets are supposed to be separate from the platform’s own assets.
Where does the ₦5 million figure come from?
This is where people often get confused.
The ₦5 million figure is not a general “MMF insurance limit” that means every Nigerian MMF investor can only recover ₦5m.
For example, the SEC’s current investor-protection framework provides an Investors Protection Fund for certain losses involving regulated capital-market operators, but that is a different mechanism from saying that every MMF investment is insured only up to ₦5m. �
SEC Nigeria +1
Also, an MMF is not the same thing as a bank deposit, so you shouldn’t automatically apply NDIC deposit-insurance limits to an MMF.
The most important thing for your ₦20m
I would verify exactly which MMF you are invested in and who the fund manager and custodian are.
SEC says investors should verify that operators are registered before investing. �
SEC Nigeria
So, for example, if your InvestNaija account says:
₦20,000,000 — Money Market Fund
I would want to establish:
1. Name of the actual MMF
2. Fund Manager
3. Trustee
4. Custodian
5. SEC registration status
6. Whether your ₦20m is actually recorded as units in that fund
If those are all properly established, the failure of the app/platform itself should not mean you are automatically capped at ₦5m.