It is a fund set up to compensate out-of-pocket investors, run by an eminent board and with $106 million in the bank. Yet as of last year it has approved just one claim in a decade, and its existence would probably come as a surprise to many of those investors whose interests it is meant to serve.

A push is under way for reform of the 25-year-old National Guarantee Fund, a scheme with one member - the Australian Securities Exchange - that was designed to compensate clients when their stockbroker went bust, or was suspended from the ASX, or transgressed in other certain, specified ways.

But ''there is now almost no awareness of the existence of the scheme,'' the consumer group Choice noted last year, a claim supported by the fact the fund had received a mere trickle of claims last decade.

Despite reporting a ''significant number'' of claims in 2009-10 and 2010-11, most stemming from the 2008 collapse of the stock lender Opes Prime, at June 30 last year the fund had allowed just one claim since 2001 - $291,700 during the 2010-11 financial year. Last year it was ordered to pay one more, worth more than $52,000, to a former Opes client after losing an appeal before Queensland's Supreme Court.

Because of the way in which Opes Prime worked - clients transferred all ownership of shares and other collateral to Opes, effectively becoming creditors - its former clients have been deemed ineligible for compensation from the fund.

The fund's restricted criteria for payouts - apparently unchanged since its launch in 1987 - has also left former clients of other high-profile casualties beyond its protection (although the fund's latest annual report confirmed the board was considering ''a number of claims in relation to other dealers'').

Last month, the high-powered Council of Financial Regulators called for reforms to the governance of the fund, and backed a review of the scope of claims it could pay out.

''Introducing a more representative and transparent governance regime to the NGF could … increase retail investor confidence in the funds, and ultimately raise investor participation in Australia's licensed markets,'' concluded the council, whose members include the heads of Treasury, the Reserve Bank and the Australian Securities and Investments Commission .

In a letter to the federal Treasurer, Wayne Swan, the council also floated the idea that the fund be merged with other investor compensation schemes. ''The goal would be to establish consistency of coverage across the market and ensure that the best use is made of any surplus funds,'' it said.

The council's scrutiny of the fund was triggered by an attempted takeover of the ASX last year by the Singapore Exchange, which was blocked by Mr Swan on national interest grounds.

The prospect of a foreign-owned ASX - and the entry of ASX rival Chi-X into the exchange market - raised questions about the future of the fund. Its governing body is the Securities Exchanges Guarantee Corporation. As the fund's sole member, the ASX nominates two directors to the SEGC's board, which then appoints the three independent directors. ASX staff are involved in the fund's administration, and the ASX receives some of its funds each year for investor education purposes.

Over the years, the SEGC's board has included a roll-call of boardroom heavyweights, such as the former ASX chairman Maurice Newman, former Queensland treasurer Keith De Lacy, and Susan Doyle, a member of the Future Fund board of guardians, who remains a director. Its immediate past chairman, Clive Batrouney, served on the board for 14 years. This year, however, two new directors have been appointed - lawyer and company director Nancy Milne, the new chairwoman and former ASIC deputy chairwoman Lynn Ralph.

Choice welcomes the prospect of board reform and says review of the scope of the fund's payouts is needed ''urgently''. ''The board has done a very good job of their core skill, which is growing the corpus of the fund,'' says the chairwoman of Choice, Jenni Mack. ''[But] the heads of claim was set up in 1987, and I'm not aware that it has ever, ever, ever changed.

''Look how the market has changed in that time. If you'd had people on the board who were sensitive to consumers' interests and needs, they would have driven the board to review the [scheme] and ensure it remained relevant to consumers.''

The ASX is ''neutral'' about the governance of the fund - a matter for the government, it says - but its own submission to the Council of Financial Regulators backed a review of the claims criteria.

''The statutory heads of claim appear outdated in the context of contemporary broker operations and do not clearly set out what claimants need to provide to prove a claim,'' the ASX said.

Even the SEGC itself, in its submission to the council, acknowledged that while the structure and operations of the broking industry have changed ''dramatically'' since the fund was established, ''the heads of claim have remained largely the same''. It ''strongly'' supported a thorough review of compensation arrangements for market licensees - one that was not limited to its own operations.

But the Stockbrokers Association of Australia has argued forcefully against changes to the fund's scope, warning that its money could be ''rapidly diminished'' if the payout criteria is broadened.

While the fund's balance of $106 million may appear healthy, the association says this is a small proportion of the $4 billion to $5 billion in turnover recorded on the ASX and Chi-X every day.

It is also far less than the estimated $600 million-plus losses suffered by Opes Prime's former clients, about a third of which they have recouped from the stock lender's liquidators.

''If claims in respect of financing arrangements were allowed - for instance, standard or non-standard margin lending arrangements such as those arising from the failure of Opes Prime - the fund will be quickly exhausted,'' the Stockbrokers Association warned in its submission to the Council of Financial Regulators.

The association's managing director, David Horsfield, told BusinessDay that a reason for the lack of claims made to the fund was the ''strong'' liquidity requirements, and other standards that brokers complied with - ensuring there was little need for clients to turn to the fund.

''If people want to have other compensation mechanisms, they can set them up,'' he says. ''But to try and water this down when it's obviously working well … it is the wrong thing to be doing.''

The fund's money was initially drawn from interest on brokers' trust accounts, but it is now funded by investment earnings. It had $60.4 million when it was formed in 1987, when the state exchanges merged to create the ASX. By 2004 this had swelled to $164.4 million, before the fund was split and $71.4 million allocated to ASX Clear.

By 2010, it had rebounded to $110 million. Last year, almost $11 million was paid from the fund to the ASX's Financial Industry Development Account, most of which was used to help pay for the transfer of market supervision from the ASX to ASIC.

At June 30 last year, the fund stood at $106 million. But until the collapse of Opes Prime, the number of claims made to the fund was dwindling even as the money available to pay claims was growing.

For the past three years, the SEGC has not published in its annual report exactly how many claim applications it has received. The last time it did so was in 2008, when it received no applications.

An ASX spokeswoman says, however, that there were four claims in 2010-11, and one so far this financial year.

According to the SEGC annual reports available on its website, in 2004 it received one claim, in 2005 nine (all of which were either withdrawn or disallowed), in 2006 it received 11 - none of which fell within its scope - and in 2007 none.