The Investor Compensation Directive (97/9/EC) sets out the basis for clients of investments firms to receive statutory compensation when an authorised investment firm fails. I understand that in the UK, the UK Financial Services Compensation Scheme operates a scheme for Deposit Guarantee, Insurance Guarantee and Investor Compensation purposes.
In Ireland, the Investor Compensation Act, 1998, transposes the requirements of the Directive and provides for the establishment of the Investor Compensation Company DAC (“ICCL”). The ICCL administers the Irish Investor Compensation Scheme.
The Scheme operated by the ICCL only deals with investor compensation matters and functions on the basis that eligible investors submit claims for compensation in circumstances where an investment firm fails and is unable to repay monies owed, or, return money and financial instruments held, administered or managed, on behalf of the client, in accordance with its legal and contractual obligations. The limit of compensation is 90% of the eligible investors net loss, subject to a maximum payment of €20,000 per eligible investor. In order for the ICCL to make a payment to an eligible investor, an Administrator must certify to the ICCL the compensatable loss of the eligible investor. In circumstances where an Official Liquidator has been appointed to an investment firm, the Act provides that the Official Liquidator may be appointed as Administrator for investor compensation purposes. Certified compensation payments are made from a fund which the ICCL collects and manages from authorised investment firms or licensed credit institutions in Ireland. Finally, contained on the ICCL website (www.investorcompensation.ie) is a Plain English Information Booklet for Consumers, and the Deputy may find this of assistance.