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Compensation available by the Investor Compensation Fund in Cyprus

Michalaki, Pitsillidou Law Firm > English Articles  > Compensation available by the Investor Compensation Fund in Cyprus

Compensation available by the Investor Compensation Fund in Cyprus

Compensation available by the Investor Compensation Fund in Cyprus

The Investor Compensation Fund(ICF) was established under Law 144(I)/2007) is part of the Investor Compensation Fund (ICF) for the Clients of Cyprus Investment Firms (CIFs). The ICF’s aim is to protect the claims of the covered clients against those Cyprus Investment Firms that are part of the ICF. This is made by giving compensation to clients if the CIF is unable to do so, because of financial circumstances that are not likely to have a better financial performance in the near future.

 

Role of the ICF:

  • First, the ICF is likely to give back to the covered clients funds that are owed to them. Moreover, the ICF may return client’s funds that the CIF withheld so as to provide the clients with investment services. The ICF may also return to the covered clients their financial instruments that were taken and managed for the clients by the CIF.
  • Furthermore, the role of the ICF is to protect Retail clients of the CIFs but it gives no protection for Professional clients and Eligible counterparties.
  • Additionally, the total compensation given by the ICF to the covered clients of the ICF’s member company will not be greater than 20,000 Euro. It does not make any difference how many accounts the client had where the investment service has taken place or the currency used.

 

Clients not covered by the ICF are the:

Institutional and professional investors:

  • Insurance companies
  • Legal organisations that have transactions with the member of the Fund and generally being part of this group of companies
  • Banks
  • Cooperative credit institutions
  • Collective investment companies in transferable securities and the companies that manage them
  • Investors described by the member as professionals, in accordance with articles 14 and 15 of the Code of Professional Conduct of IFs.
  • Social insurance institutions and funds
  • Investment Firms (IFs)

 

Another category of people who are not covered by the ICF are:

  • The shareholders of the member of the Fund, with more than 5% of the share capital.
  • Also, its partners and those who make the financial audit of the member of the Fund are not covered by the ICF.

 

  • Moreover, enterprises that have transactions with the Company cannot get compensation by the ICF.
  • People related to the administration of the member of the Fund and the management.
  • Nation states, international organizations and central, regional, federal and local administrative authorities

 

 

For more information and guidance please email Michalaki, Pitsillidou & Co LLC – iMPK Global Business Law Firm – Cyprus Lawyers, at info@impklawyers.com or visit our website at www.impklawyers.com.Tel. +357 25660092 – Fax +357 25 660097.

 

 

 

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