Commission report on the application of the export prohibition clause, Art. 7(1) of the Directive on investor-compensation Schemes (97/9/EC)
Date: 2000-02-16
Institutions: European Commission
Subjects: credit institution, indemnification, investment company, investment protection, member country

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 16.02.2000
COM(2000) 81 final

COMMISSION REPORT

on the application of the export prohibition clause, Art. 7(1) of the Directive on investor-
compensation Schemes (97/9/EC)

TABLE OF CONTENTS

Commission report on the application of the export prohibition clause, Art. 7(1) of the
Directive on investor-compensation Schemes (97/9/EC) ........................................................ 3

1.

2.

3.

Introduction ................................................................................................................. 3

General principles regulating the cross-border validity of the cover within the EU....... 4

The export prohibition clause....................................................................................... 4

3.1. Guidance for the reasoning on whether the export-prohibition clause should be
extended or not ............................................................................................................ 5

3.2.

Justifications for maintaining the export prohibition clause .................................... 6

3.3.

Justifications for not extending the export prohibition clause.................................. 7

4.

Conclusions ................................................................................................................. 8

ANNEX ............................................................................................................................... 10

1.
Analysis of the main features of the compensation schemes set up in the EU Member
States .................................................................................................................................. 10

1.1. Number and size of the existing schemes; membership ........................................ 10

1.2. Amount and scope of the cover ............................................................................ 11

1.3.

Intervention of the scheme: triggering events and procedures............................... 11

1.4.

Financing and contributions ................................................................................. 12

1.5. The top-up clause................................................................................................. 12

2.

3.

LAW, ADDRESS OF THE SCHEME, PARTICIPANTS, STATUS ......................... 13

COVER AND CONTRIBUTIONS............................................................................ 24

2

COMMISSION REPORT

on the application of the export prohibition clause, Art. 7(1) of the Directive on investor-
compensation Schemes (97/9/EC)

1.

INTRODUCTION

The European Parliament and Council Directive 97/9/EC of 3 March 1997 on
investor-compensation schemes (ICS Directive or ICSD) is one of the pillars of the
European Framework for a Single Market in the financial services field. It has its
origin in Article 12 of Directive 93/22/EC of 10 May 1993 on investment services
(ISD). With the purpose of providing a European passport to investment firms based
and authorised in one of the Member States, the ISD lays down prudential rules
which investment firms must observe at all times, including organisational provisions
aimed at preventing investment firms from using instruments and money belonging
to investors. However, the ISD does not provide any protection to investors in case
of fraud, breach of rules or other circumstances leading to the inability of an
investment firm to repay money and return financial instruments to investors. This
ultimate protection is therefore achieved, at a minimum harmonised level,
through the ICSD.

The ICSD entered into force on 26 March 1997, the deadline for implementation in
the Member States being 26 September 1998(1). In order to protect primarily small
investors and maintain confidence in the financial system, it requires Member States
to establish and recognise “investor-compensation schemes” to provide cover to
investors’ claims when an investment firm is unable to meet its obligations. Joining a
scheme is a precondition for having an authorisation under the ISD; if the protection
becomes unavailable, this authorisation shall be withdrawn (2).

It should be pointed out that the ICSD applies to all investment firms, including
credit institutions authorised to provide investment services. Moreover, the ICSD is
modelled after the European Parliament and Council Directive 94/19/EC of 30 May
1994 on deposit-guarantee schemes (DGSD). Here, the purpose was to grant a
minimum protection to depositors in the event of the closure of an insolvent credit
institution. But, whereas in the DGSD a protection is provided for deposits arising
from normal banking transactions, money claims arising from investment business
carried out with a credit institution can be covered according to the provisions of the
ICSD (3).

This report complements the one prepared for the DGSD on the same subject,
adopted by the Commission on 22/12/99.

1

2

3

Art. 15 of ICSD
Art.5 (4) of ICSD
Art. 2 (3) of ICSD

3

2.

GENERAL PRINCIPLES REGULATING THE CROSS-BORDER VALIDITY OF THE COVER
WITHIN THE EU

A basic principle set out in the ICSD is that if an investment firm belongs to a
scheme, the scheme will also cover its investors at branches set up in other Member
States (4). This provision extends to investment-compensation schemes the general
principle of “mutual recognition”. In other terms,
the home country provisions
applied to the head office of an investment firm are extended also to its EU branches;
the assumption being that these form, within the Internal Market, a single entity
subject to single authorisation and centralised supervision of its activities.

However, the Directive itself imposes two important exceptions to this principle.
First of all, it states that, at least during a transitory period, and in order to avoid
possible market disturbances, a scheme offering a higher or wider protection must
downgrade its cover at branches located in other Member States where ICS are less
generous. This clause, known as “export-ban” or “export prohibition clause”, exists
also for deposit-guarantee schemes (5).

The second exception, known as the “topping-up” clause, is that an investment firm
belonging to a scheme offering a lower or narrower protection will have the right to
adhere to a host scheme in order to upgrade its cover at branches located in other
Member States where ICS are more generous. A similar clause also exists for
deposit-guarantee schemes (6).

Both clauses aim at avoiding unequal conditions of competition based on the cover
offered to investors. The relevant difference is that the export prohibition clause
reduces the level of protection for some investors, who would otherwise receive a
higher protection, whereas the topping-up works in favour of an upgrade of the
protection (though the decision to effectively increase the cover remains with the
investment firm itself, which may decide not to join the host country scheme).

The export-ban clause represents a relevant exception to the principle of the Single
Market for investment services, in that it discriminates between investors of the same
investment firm in case of insolvency. In addition,
is estimated that market
disturbances may be expected only for a short period of time. That is why the “export
prohibition clause” is envisaged in the Directive only as a transitory measure and is
due to expire at the end of 1999, unless the European Parliament and the Council
decide otherwise, following a proposal from the Commission to extend its validity.

it

3.

THE EXPORT PROHIBITION CLAUSE

According to art.7 (1), sub-par.2, of the Directive, the Commission is required to
report on the export prohibition clause and to discuss the opportunity to extend its
validity beyond 1999. The wording of this article is as follows:

4

5

6

Article 2(1) states that “Each Member State shall ensure that within its territory one or more investor-
compensation schemes are introduced and officially recognised”. Article 7 establishes the principle that
“investor-compensation schemes - introduced and officially recognised in a Member State in
accordance with article 2(1) - shall also cover investors at branches set up by investment firms in other
Member States”.
Art.4 (1), 2nd sub-par., of DGSD for deposit-protection.
Art.4 (2) of the DGSD.

4

“Until 31 December 1999, neither the level nor the scope, including the percentage,
of the cover provided for may exceed the maximum level or scope of the cover
offered by the corresponding compensation scheme within the territory of the host
Member State. Before that date, the Commission shall draw up a report on the basis
of the experience acquired in applying this sub-paragraph and Art.4(1) of Directive
94/19/EC (7) referred to above and shall consider the need to continue those
provisions. If appropriate, the Commission shall submit a proposal for a Directive to
the European Parliament and the Council, with a view to the extension of their
validity.”

Reporting within the mentioned deadline is particularly important because it
helps to clarify the legal framework which investment firms will face beyond
31.12.1999.

The present section focuses on the export prohibition clause, with the purpose of
in the light of recent
providing views in favour or against
developments. In particular, sub-session 3.1 lists the criteria that should guide the
reasoning on this issue; in sub-sessions 3.2 and 3.3, the main arguments in favour
and against
the prolongation of the validity of the clause are put forward and
examined.

its prolongation,

3.1.

Guidance for the reasoning on whether the export-prohibition clause should be
extended or not

We should start by pointing out that the wording of the export-prohibition clause in
the ICSD stems from a compromise reached by the Commission and certain Member
States for the DGSD during the negotiations related to that Directive (8).

that

time,

some delegations were particularly concerned that

At
“market
disturbances” could be caused by branches of credit institutions established in a host
Member State offering levels of cover higher than those offered by domestic credit
institutions. In other words, it was feared that differences in the level of deposit
protection could drain deposits
foreign
institutions. There existed no evidence of this, as there was no evidence of how the
new regulation on deposit-protection would have impacted on the preferences of
depositors when choosing a credit institution. Similar reasons led, some years later,
to accept an export-ban clause in the ISCD.

from domestic institutions

towards

7

8

The wording of the second and third subparagraphs of Article 4 od DGSD is as follows:

“Until 31 December 1999 neither the level nor the scope, including the percentage of cover provided,
shall exceed the maximum level or scope of cover offered by the corresponding guarantee scheme
within the territory of the host Member State.

Before that date, the Commission shall draw up a report on the basis of the experience acquired in
applying the second subparagraph and shall consider the need to continue those arrangements. If
appropriate, the Commission shall submit a proposal for a Directive to the European Parliament and the
Council, with a view to the extension of their validity.”
This is explained very clearly in the Commission’s report on the DGSD. In particular, session 2.1
underlines that, in the DGSD, the clause was the outcome of a compromise between the Commission,
reluctant to accept the export prohibition, certain delegations, which on the contrary attached particular
importance to this clause, and the Legal Service, which considered it to be admissible only as
temporary.

5

A common element of the two directives is that the export-ban clause is temporary
in nature, that is, it is going to end unless the European Parliament and the Council
decide otherwise, following a proposal from the Commission with a view to the
extension of its validity. This aspect was emphasised in the European Court’s
judgement of 13 May 1997, related to the DGSD (9): in rejecting the action for
annulment of the clause brought by the German Government, the Court states, in
particular, that “in view of the complexity of the matter and the differences between
the legislation of
the Parliament and the Council were
empowered to achieve the necessary harmonisation progressively”.

the Member States,

A second element can be appreciated comparing art. 7(1), sub-par.2, of ICSD and
art.4(1), sub-par.3, of DGSD, both relating to the criteria that should guide the
Commission when preparing its report on the export-prohibition clause. Both reports
shall be drawn up “on the basis of the experience acquired in applying” this
clause.

There can be a trade-off between the principle that the export-prohibition clause
should be temporary and the consideration that any decision should be based on
experience. In general, the longer the period of application of the clause, the longer
the experience. The Commission should therefore try to hit a balance between the
relevance attributed to the achievement of the Single Market for Financial Services,
on the one side, and the necessity to avoid market disturbances arising from
insufficient harmonisation of the basic rules, on the other side.

But, if we again compare the two directives, we can see that in the ICSD an
additional criterion should be respected: whereas the DGSD states that the report
shall be drawn up “on the basis of the experience acquired in applying” this clause,
the ICSD stipulates that the Commission shall base its report also on the experience
acquired in applying ... Art.4(1) of Directive 94/19/EC” (10).

The link with the DGSD is specially relevant in this respect. Though most of the
Member States have now implemented the ICSD (14 out of 15), experience on how
the provisions of the directive actually work is scarce. In most of the countries, the
implementing measures were approved at the end of 1998/ beginning of 1999, and in
some of them the framework was completed through administrative and government
provisions in the final months of 1999. On the contrary, the credit institutions have
benefited from a longer period to analyse the operation of this clause: Directive
94/19/EC was approved on 30 May 1994 and implemented by the Member States
during 1995.

This means that the experience with the export-ban clause in the DGSD and the
decision taken in the banking sector must be considered a key element for the
Commission’s decision on the ICSD.

3.2.

Justifications for maintaining the export prohibition clause

The main argument put forward by certain Member States as a justification for
maintaining the clause is that not enough experience is available yet on how the
institutions nor
export-ban clause really works. In other words, neither credit

9

10

On this point, see the Commission’s report on DGSD.
Art.4(1) of the DGSD precisely deals with the export-ban clause in the field of deposit-protection.

6

investment firms with branches in another Member State have, for reasons directly
linked to their financial situation, been unable to meet their obligations, during the
period under review (11).

the possibility of market disturbances arising from
Following this reasoning,
different levels of the cover cannot be wholly ruled out today, as it could not be
wholly ruled out when the Directive was approved in 1997 and therefore, the
argument goes, the clause should be maintained in the future.

In particular, before lifting the ban, certain Member States would like to see more
experience of the degree of the convergence process in the European financial
market and on cross-border defaults under investor compensation arrangements; the
concern being that practice in paying compensation can be more complicated than
passing the implementing law and could result in differences from one Member State
to the other.

3.3.

Justifications for not extending the export prohibition clause

The principle of a Single Financial Market. The export clause is an exception to the
principle of a single financial market and creates obstacles to the exercise of the right
of establishment and to the freedom to provide services. Moreover, it introduces
discrimination between investors of the same investment firm in case of insolvency
and becomes incompatible with the fact that, from both a legal and a financial
viewpoint, an investment firm and its branches should be regarded as a single entity.
It was against this background that the Council and Parliament adopted the export
prohibition clause only as a transitory arrangement. The exception’s main
justification was the complex and unclear situation existing before the adoption of
the Directive.

The developments of
the financial sector. The financial sector has changed
considerably since the adoption of the Directive, both as a result of the harmonisation
of investor-compensation schemes and as a result of financial integration.

€

First, concerning the harmonisation of compensation schemes, much has happened
during the transitional period, which ends on 31 December 1999. A regulatory
minimum level of cover (
20 000) is established in all Member States and the
coverage of all branches – wherever established – is acquired. It is worth considering
that, before the approval of the ICSD, most Member States did not even have a
compensation scheme for investors’ protection. In comparison, the legislation in
force today shows that levels of investor-compensation tend to converge for most
Member States. In fact, by 1st January 2000, all Member States but four will have a
28.000 per investor. The
compulsory compensation level of between
€
only exceptions will be Denmark (for cash,
€
20.000), Belgium (for cash,
cash and

20.000), France (
73.000) (see annex).

70.000 for financial instruments) and UK (

40.000; for financial instruments

20.000; for securities

20.000 and
€

70.000 for

€
€

€

€

€

€

To sum up, the large differences that existed at the moment of adoption of the
directive and which justified a temporary exception from the Single Market principle

11

See also the Commission’s report on DGSD, session 3.2.

7

do no longer prevail. Consequently the principal justification to make an exception
has disappeared.

The second trend in the financial market, which has important consequences for the
evaluation of the export prohibition clause, is the process of financial integration.
This development has been experienced in the banking market as well (12). In the
securities field, the growth of information technology and of electronic networks has
been the main driving force for change; it has revolutionised the way in which
securities markets and intermediaries operate. The process of globalisation in the
economy has led to the internationalisation of financial portfolios and investment
decisions. Technology has worked in favour of the elimination or circumvention of
national boundaries.

In the banking sector, competition has urged banks to embark on mergers and
acquisitions to consolidate their position and be able to compete internationally.
Securities firms belonging to banking groups have also been involved in this process.

The introduction of the Euro has triggered structural changes, eliminating exchange
risk and putting the basis for increased financial integration and competition. Work
on achieving a truly single market for financial services is going on through the
implementation of the Financial Services Action Plan, which identifies concrete and
urgent actions to “secure the full benefits of the single currency and an optimally
functioning European financial market” (13).To sum up, the factors for integration
have been strong in the last few years and this is clearly going to continue.

In the process of financial integration, the non-export clause is a residual element
which splits the Single Market into national markets. It needs to be eliminated to
promote a sound integration of the European financial market.

Estimate of potential disturbances. As for possible market disturbances resulting
from the expiration of the export prohibition clause, experience can be drawn from
the banking sector. Here, “no Member State has any objective and factual
information which might be used to support concrete concerns that such risks are
likely or significant. Nor are Member States able to specify or quantify the potential
market disturbances for domestic institutions in the event of an expiration of the
export prohibition clause” (14).

4.

CONCLUSIONS

The investor compensation schemes in Member States have now been harmonised
according to the principles and objectives of the Directive. Against this background,
it seems disproportionate to prolong the export prohibition clause in order to avoid
market disturbances that nobody could estimate or specify and which seem highly
unlikely to happen.

12

13

14

See the Commission’s report on DGSD, session 3.3.
Financial Services – Implementing the Framework for financial markets: Action Plan. Commission
Communication of 11.5.1999 COM(1999)232.
See the Commission’s report on DGSD, session 3.3.

8

A prolongation of the export prohibition clause would mean that the protection for
such a remote risk would be considered more important than the completion of the
Single Market for financial services.

The Commission is aware that not all the Member States have implemented the
ICSD early enough to have benefited from practical experience with the operation of
its provisions (see section 3). In this respect, the strong links between the ICSD and
the DGSD should be considered.

First of all, because the ICSD is actually a transposition of the DGSD rules and
principles in the securities field. Not only are the two directives complementary in
some aspects (the 97/9/EC on investor-compensation schemes also applies to banks
as far as investment services are concerned); they are also identical with regard to the
articles concerning the cross-border provision of services. This is why any
experience of problems or questions arising from the banks’ side might be used to
supply useful information for investment firms.

Secondly, there’s an interest of the European regulator to have a comprehensive
picture of how the “twin” directives work. In this regard, it is important to keep in
mind that, though the DGSD was approved in 1994 and the ICSD only in 1997, the
deadline for the Commission to produce the reports on the export-ban clause is the
same (31/12/1999).

Moreover, the Commission is of the opinion that consistency with the DGSD should
be preserved. Here, on the basis of the report adopted by the Commission according
to art.4(1) of DGSD, the export-ban clause is going to expire for deposit-guarantee
schemes. It would be difficult to justify, after 1999, the “export-ban” clause in the
in the DGSD. As far as customers’ protection is concerned,
ICSD and not
considering that
some schemes cover both deposits and investors’ claims,
discrimination would be introduced between depositors and investors of the same
foreign branch of an institution.

However, after the clause has expired (31 December 1999) the Commission will
closely monitor the evolution of the situation, with particular attention to serious
market disturbances, on the basis of elements supplied by the national authorities of
Member States according to their preferences. The Commission can then consider
the possibility of proposing appropriate legislative measures.

9

ANNEX

THE IMPLEMENTATION OF DIRECTIVE 97/9/EC

ON INVESTOR-COMPENSATION SCHEMES

IN THE EEA STATES

1.

ANALYSIS OF THE MAIN FEATURES OF THE COMPENSATION SCHEMES SET UP IN THE
EU MEMBER STATES

So far, 14 out of 15 Member States have formally implemented the Directive. The
missing Member State is Luxembourg, which has informed the Commission that a
draft bill was put to the Luxembourg Parliament in March 1999 and is still in the
pipe line. The bill might be adopted by the end of 1999. In the following report,
reference is made only to the 14 Member States which have notified implementation
of the Directive.

1.1.

Number and size of the existing schemes; membership

The Directive asks the Member States to ensure that within their territories “one or
more ICS are introduced and officially recognised” and states that no investment
firm may carry on investment business unless it belongs to such a scheme. The
definition of “investment firm” is based on art. 2(1) of the ISD and includes credit
institutions, if authorised to provide investment services.

In the case of credit institutions, the Directive considers that some claims might be
subject also to the DGSD and stipulates that: (1) each Member State shall direct such
ambiguous claims under one or other of these Directives; (2) no claim shall be
eligible for compensation more than once.

These provisions have been implemented in 14 Member States. Most Member States
have established only one scheme to provide compensation for investment services.
In some of the Member States, the possibility to create additional private schemes is
considered in the regulatory framework but has not been used so far. Germany,
Spain, Ireland, The Netherlands and Austria have established more than one scheme
but participation is linked to the type of the services provided, or to the nature of the
institution. For instance, one scheme is for investment firms, the other/s for a specific
category of banks. In Belgium, Denmark, France and Sweden, there is only one
scheme which provides compensation to both investors and depositors (covering
claims arising from ICS and DGS directives). As a consequence, it seems that, at this
very early stage, investment firms and banks are not really free to choose the scheme
to adhere to.

As far as credit institutions are concerned, two options have prevailed: one consists
in the establishment of a comprehensive fund, covering a bank’s depositors and
the investor-compensation scheme covers cash
investors. In the second option,
claims only when arising from the provision of investment services whereas deposits
are covered by a separate deposit-guarantee fund. Additional research is needed to
verify how the first option is actually implemented and to make sure that no violation
of either the DGSD or the ICSD occurs (for instance, in the calculation of the
maximum cover per depositor/investor).

10

1.2.

Amount and scope of the cover

The Directive stipulates that schemes should provide for a minimum cover of
20.000 per investor’s claim and, below this amount, of at least 90% of the claim.
Some investors might be excluded from the cover, owing to their nature (professional
or institutional investors) or on the basis of their relationship with the investment
firm in trouble.

€

These provisions have been implemented in 14 Member States. In particular, all the
schemes have established a maximum limit to the amount that can be paid per
investor in case of a compensation claim. With few exceptions, this amount sticks to
the minimum indicated in the ICSD (
20.000). In particular, from 1/1/2000 on
(which is the end of the “transitory” period) the covers are as follows:

€

• In most Member States the maximum cover per investor is

€

Ireland and Finland also have a “90% of the claim” limit below
€
Portugal (

28.000) are not far from that amount.

25.000) and Sweden (

€

20.000. Germany,
€
20.000.

• Denmark has a

€

cover for securities; Belgium has a
20.000 maximum cover for securities; but
compensation for depositors (in case of a bank’s failure).

40.000 maximum cover for cash and a

€

20.000 maximum
€

20.000 maximum cover for cash and a

these amounts also include the

€

• For two Member States, the cover is significantly higher than the minimum
€
73.000 cover is envisaged, with some
70.000 for
70.000 for financial instruments is set (but the amount for cash also

indicated in the ICSD: for UK, a
percentage limits below this amount; in France, a double limit of
cash and
includes the compensation for depositors, in case of a bank’s failure).

€

€

As regards the scope of the cover, the situation is less homogeneous. In Germany,
Spain, The Netherlands, Austria and the UK, all the categories of investors listed in
annex 1 of ICSD are excluded from the cover. This is not the case in the other
Member States. Nevertheless, in all Member States, investment firms and institutions
participating in the scheme are excluded from the cover. In some Member States,
some kinds of derivatives are not covered. In Austria and Portugal, for instance,
derivatives on commodities are not covered.

1.3.

Intervention of the scheme: triggering events and procedures

With the purpose of concretely protecting investors, the Directive regulates in detail
the development of the compensation procedure, establishing rules for customers’
information and deadlines for payments. All the Member States have formally
implemented these rules. However, considering that no compensation claim has
arisen in any of the Member States falling under the provisions of the Directive, no
experience is yet available on how the Directive actually works.

11

1.4.

Financing and contributions

One aspect of special interest is the solvency of the scheme itself. The Directive does
not regulate the way in which ICS are to be financed, but establishes the following
principles: (1) the cost of the scheme must be borne by investment firms themselves;
(2) the financing capabilities of the schemes must be in proportion to their liabilities;
(3) the stability of the financial system must not be jeopardised.

There are in principle two kinds of schemes: those which periodically levy money
and contributions from the participants; and those which only ask for commitments
by the participants to pay certain amounts in case of compensation claims. In the first
case, to make it easier for the fund to meet its obligations within the strict deadlines
established in the regulation, a link is often established between the contributions
levied and the value of financial instruments and money held by (or the number of
clients of) the institutions participating in the scheme. The following additional
mechanisms have also been envisaged by some Member States: supplementary
contributions, to be levied when the assets of the fund are not sufficient to cover the
claims; and borrowing facilities from banks or other schemes. Additional information
is being collected to make sure that no violation of the mentioned principles occurs;
for instance, when the borrowing facilities are provided by the Central Bank or a
political body. For those funds which do not levy contributions from their members,
a delay in the payment of compensation claims might occur if the resources of the
immediately available. This option therefore deserves additional
fund are not
examination.

1.5.

The top-up clause

All the 14 Member States have included the “topping-up” clause in their legislation,
setting rules that enable branches of investment firms established in other Member
States to participate in their schemes. For all of them, no experience is yet available
on how the clause operates. Owing to the fact that the cover has been set at an
amount close or equal to the minimum level in the Directive, it is estimated that no
experience will be available, even in the future.

For the UK, 14 branches of European institutions have applied to take part in the
scheme but half of the requests come from one of the countries which has only
recently implemented the Directive (France). These institutions might
therefore
reconsider their position now that their Home State has implemented the Directive
(15). As for France, no application to the scheme has been received up to now, due
perhaps to the fact that the ICSD was implemented only in late September 1999.

15

France has in fact introduced an even higher level of protection than UK.

12

2.

LAW, ADDRESS OF THE SCHEME, PARTICIPANTS, STATUS

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

BELGIUM (B)

Act of 17-12-1998;
Decree of 17
December 1998;

Executive orders
concerning the deposit
and financial
instrument protection
fund (Moniteur belge,
25 February 1999).

DENMARK (DK) Act No 415 of

26-6-1998; executive
order of April 9, 1999.

Investment firms and
credit institutions for
investment services. The
“sociétés de gestion de
fortune”, which are not
allowed to receive
securities or money
from their clients, are
obliged to adhere on a
separate basis: their
contributions are levied
only when a
compensation claim
arises, concerning
another “société de
fortune”.

Credit institutions,
mortgage credit
institutions and
securities brokers. Each
forms a separate
department and is
supposed to cover its
own losses. The fund is
also responsible for
depositor protection.

Fonds de Protection des Depôts et des
Instruments Financiers

Boulevard de Berlaimont 14

B-1000 Brussels

Mr H. Debremaeker

Tel. ++32/2-221 38 92

Fax.++32/2-221 32 41

The fund also provides deposit guarantee for
banks.

It

Public, with legal capacity.
is
managed by a board of 12 people,
representing the public sector and the
financial industry. The “Commission
Bancaire et financière” can take part
in the meetings of the board. Private
schemes can also be created.

The Guarantee Fund for Depositors and
Investors

Niels Juels Gade7

PO Box 2082

DK – 1013 Copenhagen K

The fund also provides deposit guarantee for
banks.

Private, established by law, under the
supervision of the Danish Financial
Supervisory Authority.

13

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

GERMANY (D)

Gesetz zur Umsetzung
der EG-
Einlagensicherungs-
richtlinie und EG-
Anleger-
entschaedigungs-
richtlinie vom 16/7/98;
Verordnung uber die
Beitraege zu der
Entschaedigungs-
einrichtung der
Wertpapierhandels-
unternehmen bei der
Kreditanstalt fur
Wiederaufbau.

The same

(1) Entschädigungseinrichtung der
Wertpapierhandelsunternehmen (EdW)

Charlottenstr. 33/33a

10117 Berlin

Tel. ++49/30-203 699 0
Fax:++49/30-203 699 5601

(1) Institutions
providing financial
services and investment
firms (securities firms)
for claims related to
investment services;
banks different from
those indicated below
(under 2) for claims
related to investment
services.

Public. The Scheme was established by
the “Kreditanstalt fur Wiederaufbau” as
a special Fund, not capable of acting as a
legal entity

(2) Private savings
banks, for money and
securities related to the
provision of investment
services

(2) Entschaedigungseinrichtung deutscher
Banken GmbH,

Private

Burgstrasse 28,

10178 – Berlin Germany

Fund (2) also provides deposit guarantee for
banks.

14

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

GREECE (EL)

Law 2533/1997

Investment firms. Banks
may join the fund in the
future.

Athens Stock Exchange Members’ Guarantee
Fund

Fidiou 14-16,

TK 10678 ATHENS

Legal person of private law with a public
function, under the supervision of the
Capital Market Commission.

(1) Compulsory:
Financial institutions
authorised to provide
investment services.

(1) N.A.

SPAIN (E)

L.37 of 16/11/1998;
some points of the
Directive have to be
regulated through a
royal decree; the latter
is going to partly
modify the regulation
concerning the “Fondo
de garantia de
dépositos bancarios”.

Some of the answers
are based on the
content of the royal
decree.

(1) and (2): Private. Supervised by
the “Comision Nacional del Mercado
de Valores”. The schemes can be
established as separate funds and are
not capable of acting as legal entities.
They are administered by limited
companies
the
authorised
supervision authority.

by

15

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

(3), (4) and (5): Mixed

(2) On a voluntary basis:
Financial institutions
which are members of
the Stock exchange may
build up a specific
scheme

(3) Banks

(4) Banks

(5) Banks

(2) N.A. This possibility has not been exploited
for the time being

(3) Fondo de Garantía de Depósitos en
Establecimientos bancarios

(4) Fondo de Garantía de Depósitos en Cajas de
Ahorro

(5) Fondo de Garantía de Depósitos en
Cooperativas de Crédito

Address for all three institutes:

José Ortega y Gasset 22

E - Madrid 28006

Tel. ++34/91-4316645

Fax ++34/91-5755728

Funds (3)-(5) also provide deposit guarantee
for banks.

16

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

FRANCE (F)

Law N.99-532 of
25/6/1999 (art.70 in
particular amends
art.62 of Law N.96-
597 of 2/7/1996).

Acts of 29/9/99
nn.99/14; 99/15; 99/16
and 99/17

Credit and financial
services institutions
authorised to provide
investment services.

N.A. The system is bringing together both the
pre-existing schemes for deposit-guarantee of
credit institutions and the pre-existing scheme
covering the operations of French “Sociétés de
Bourse”

The Fund also provides deposit guarantee for
banks.

The scheme is administered by the
Deposit Guarantee Fund.

IRELAND (IRL)

Investors
Compensation Act
N.37/1998

(1) Credit institutions,
investment firms whose
activity is not restricted,
stockbrokers.

(2) Investment firms
with restricted activity,
insurance intermediaries
when they provide
investment services.

Investor Compensation Company Ltd

C/o The Central Bank of Ireland

P.O. Box 559

Dame Street

Dublin 2

The ICCL has established two funds:

(1) Fund A

The scheme is private, managed by a
board. The Central Bank of Ireland is the
supervisory authority and provides
administration services to the ICCL. The
ICCL can create more than one fund,
each separate from the others, if it has
prior approval from the supervisory
authority.

(2) Fund B

17

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

ITALY (I)

Act N.58/1998, art. 59.

Decree n.485 of
14 November 1997;
Decree 30/6/1998.

N.A. A draft bill has
been filed with the
Conseil d’Etat and the
Parliament.

Banks, investment
services and financial
institutions providing
investment services;
agenti di cambio.

Investment firms and
credit institutions for
investment services.

Fondo Nazionale di Garanzia

Via del Corso, 184

00100 Roma – Italy

N.A.

Private, authorised by the Ministry of
Treasury, regulated by statute. General
principles are fixed by law and
administrative regulation.

Private, regulated by statute. The
Scheme will be supervised by the
“Commission de Surveillance du Secteur
Financier”.

LUXEMBOURG
(L)

Information is
based on the
parliamentary
proposal

NETHERLANDS
(NL)

(1) Section 28a of the
Act on the Supervision
of Securities Trade
1995, declared
generally binding by
Royal Decree of 21
September 1998

(1) Investment firms and
credit institutions for
investment services.
Banks are covered by
CGS; their participation
in the ICS is only for the
purpose of the funding
of the scheme in case of
shortage of funds

(1) Investor Compensation Scheme of Securities
Institutions for Claims of Investors (ICS)

Stichting Toezicht Effectenverkeer

(Securities Board of the Netherlands)

P.O. Box 11723

1001 GS Amsterdam

Private, regulated by a public law. The
provisions are the outcome of close
consultation between the supervisory
authorities and the representative
organisations of the securities sector.
The “fund” is managed by a foundation.
The securities authority (SBN)
administers and verifies claims and
makes payments.

18

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

(2) Section 84 of the
Act on the Supervision
of the Credit System
1992; Section 28a of
the Act on the
Supervision of
Securities Trade 1995,
declared generally
binding by Royal
Decree of 21
September 1998, and
by Royal Decree of 28
September 1998.

Act N.63/1999,
amending in particular
the Banking Act and
the Investment
Services Act.

AUSTRIA (A)

(2) Banks. All claims on
banks are covered by
this scheme, even if they
are relative to
investment services

(2) Collective Guarantee Scheme of Credit
Institutions for Repayable Funds and Portfolio
Investments (CGS)

De Nederlandsche Bank NV

(The Dutch Central Bank)

PO Box 98

NL – 1000 AB Amsterdam

Fund (2) also provides deposit guarantee for
banks.

Private, regulated by a public law. The
provisions are the outcome of close
consultation between the supervisory
authorities and the representative
organisations of the sector. There is no
“fund” to be managed, since
contributions are determined ex post.
The supervisory authority (DCB) is
responsible for implementing the
scheme.

(1) Credit institutions
not belonging to one of
the systems indicated
below (from 2 to 5), for
money and securities
related to investment
services

(2) Sparkassen for
money and securities
related to investment
services

(1) Einlagensicherung der Banken und Bankiers
Gesellschaft m.b.H.

Private

Börsegasse 11

A - 1013 Wien

(2) Sparkassen- Haftungs Aktiengesellschaft

Private

Grimmelshausengasse 1

A - 1030 Wien

19

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

(3) Raiffeisenbanken for
money and securities
related to investment
services

(4) Volksbanken for
money and securities
related to investment
services

(5) Hypothekenbanken
for money and securities
related to investment
services

(6) Investment firms
authorised as portfolio
managers for money and
securities received from
their clients.

(3) Österreichische Raiffeisen-
Einlagensicherung reg. Gen m.b.H.

Private

Hollandstraße 2

A - 1020 Wien

(4) Schulze-Delitzsch-Haftungs-genossenschaft
reg. Gen. M.b.H.

Private

Schottengasse 10

A - 1010 Wien

Funds (1)-(4) also provide deposit guarantee
for banks.

(5) Hypo-Haftungsgesellschaft m.b.H.

Private

Brucknerstraße 8

A - 1040 Wien

Fund (5) also provides deposit guarantee for
banks.

(6) Entschaedigungssystem der
Vermoegensverwalter in Gruendung durch:

Private

Rechtsanwalt Dr. Neumayer,

Baumannstrasse 9/11,

A-1030 Wien

20

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

Investment firms and
banks for investment
services.

Investor Compensation System

Av. Fontes Pereira de Melo

1056 –801 Lisbon - Portugal

Investment firms and
credit institutions.

Investors’ Compensation Fund

P.O. Box 1009

00101 Helsinki, Finland

Mrs Leena Linnainmaa

Tel ++358-940561244

Fax ++358-940561291

PORTUGAL (P)

Decree-Law
No 222/99 of
22-6-1999.

Other regulation in
progress. The system
is now being
implemented.

FINLANDE (FIN) Act on Investment

Firms No 579/1996 as
amended by Act
518/1998; Securities
Market Act (495/1989
as amended by Act
522/1998); Act on the
right of a foreign
investment firm to
provide investment
services in Finland
(Act 580/1996 as
amended by Act
519/1998).

Public. The system is independently
managed by a board, whose members
(representatives of the supervisory
authorities and of the industry) are
nominated by the Ministry of Finance.
The Securities Market Commission
provides the technical and administrative
support.

Private, administered by representatives
of the participating institutions. The
rules of the fund are confirmed by the
Ministry of Finance.

21

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

SWEDEN (S)

Act 1999/158;
Banking Business Act
(1987/617); Securities
Business Act
(1991/981); Lag
1999/199; Ordinance
1996/595.

Securities institutions
(and banks) for
investment services.
Funds received by
securities institutions in
relation to investment
services are covered by
the Deposit Guarantee
Scheme.

UNITED
KINGDOM (UK)

Financial Services Act
1986 (FSACT); FS
(compensation of
investors) Rules 1994
as amended

Any firm carrying on
investment business as
defined in FSACT and
authorised under
FSACT

Deposit Guarantee Board
Regeringsgatan 48
Box 7369, S-103 90 Stockholm

Mr Hans Jacobson (Chairman)

Mr Thomas Norling (Director)

Tel. ++46/8-7878100, Fax :++46/8-241335

The fund also provides deposit guarantee for
banks.

Investor Compensation Scheme Ltd

Cottons Centre

Cottons Lane

London SE1 2AB

Public. The scheme operates by the
Deposit Guarantee Board (under the
Ministry of Finance). The same Board is
also responsible for the Swedish Deposit
Guarantee Scheme.

Private company limited by guarantee
subject to rules written by FSA. It has to
produce a quarterly report for FSA.
There is a Memorandum of
Understanding between FSA and ICS.

UK is planning to
replace the existing
ICS, the deposit
guarantee scheme and
other compensation
schemes now
operating in the UK
with a single scheme.
The proposal is
included in a draft
“Financial Services
and Markets Bill” that
will probably come
into force in 2000.

22

COUNTRY

LAW OR ACT

PARTICIPANTS

ADDRESS OF THE SCHEME

STATUS

ICELAND (IS)

N.A..

Information is
based on the
parliamentary
proposal.

There is a
parliamentary
proposal, which should
be adopted as of
January 2000.

Commercial banks,
savings banks, other
credit institutions and
investment firms for
securities and cash
related to securities
trading

N.A.

In the parliamentary proposal, the scheme
should be the same as the Deposit Guarantee
Scheme according to Directive 94/19/EC.

Private, self-owned institution; no links
with supervision authorities.

LIECHTENSTEIN
(LIE)

N.A.

NORWAY (NOR) Act No 79 of
19-6-1997 on
Securities Trading
(section 8-13);
Regulation n.983 of 14
October 1996 on
Investment Firms’
Investor Protection
Arrangements

N.A.

N.A.

N.A.

Investment firms and
credit institutions
offering investment
services.

NO NAME OR ADDRESS

The guarantee must be supplied by a savings- or
commercial bank, an insurance company or a
financial institution authorised according to Act
n.40 of 10 June 1988 on Financial Activity or
equivalent institution in another EEA State.

The scheme is regulated by public
legislation and regulations, but is
managed by the relevant private parties.
The supervisory authority
(Kredittilsynet) must receive a
“guarantee declaration” before
authorisation is given to the relevant
investment firm. The same authority has
been delegated certain powers related to
the scheme.

23

3.

COVER AND CONTRIBUTIONS

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

BELGIUM (B)

Fonds de Protection
des Depôts et des
Instruments Financiers

The fund also
provides deposit
guarantee for banks.

ADDITIONAL
SERVICES

€

20.000 for cash and
20.000 for securities
€

15.000 for cash and
15.000 for securities
until 31/12/99

€

€

The fund can offer
financial assistance in
case of liquidation,
unwinding, etc. of banks
or “sociétés de Bourse”

FROM THE COVER

Investors listed in annex 1 of directive 97/9/EC
are excluded from the cover, with few
exceptions.

In particular, the fund does not exclude:
• Investors related to other firms belonging
to the same group of the investment firm
and
in trouble
persons
personally
holding up to 5% of the capital, auditors)
• close relatives and third parties acting on

(directors, managers
liable members,

behalf of the mentioned categories

There are two kinds of contributions: the
first is levied as soon as an institution
joins the scheme; the second is related to
the profits of the firm and to the amount
of money and securities held and is due
on a yearly basis.

Additional contributions may be levied
in case of a shortage of funds.

24

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

DENMARK (DK)

The Guarantee Fund
for Depositors and
Investors

The fund also
provides deposit
guarantee for banks.

ADDITIONAL
SERVICES

40.000 for cash;

20.000 for securities

€

€

No difference between
the three departments
(the scheme is the same
for credit institutions,
mortgage credit
institutions and
securities brokers) but
for certain kinds of
deposits with credit
institutions the cover is
higher.

No annual levies.

A total amount considered sufficient to
cover the claims has been fixed for each
of the three departments. This is
distributed among the members
according to market share and
redistributed each year.

Part of the contributions are paid in (1/4
of the total).

FROM THE COVER

Institutions that participate in the fund are
excluded from the cover.

In particular, the fund does not exclude:
• Government agencies
• close relatives of directors, managers and
the

liable members

of

personally
investment firm

• persons holding up to 10% of the capital
of the investment firm; close relatives of
persons holding more than 10%

• auditors
• other firms in the same group
• responsible investors
• large companies
• other institutional investors

The category “other institutional investors” is
not defined.

25

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

ADDITIONAL
SERVICES

FROM THE COVER

GERMANY (D)

(1) Entschädigungs-
einrichtung der
Wertpapierhandelsunte
rnehmen (EdW)

90% of the claims
arising from investment
services, up to a max. of
€

20.000 per investor

Investors listed in annex 1 of directive 97/9/EC
are excluded from the cover. The category
“other institutional investors” is not defined.

Claims coming from money laundering or from
other offences are excluded.

Claims in a currency other than those of the
EEA and the Euro are excluded.

Two kinds of contributions are
envisaged: the first – levied in August
1998 from the participating firms – was
determined as a percentage of the
amount of the administered funds (0,1%
50 and
or 1%; minimum amount of
7.300). The second (paid on a yearly
basis) is determined as a percentage of
the gross profits of the category (0,3%,
€
1%, 2%; minimum amount, in 1999,
200).

€

€

In case of a shortage of funds arising
from a compensation claim, a special
contribution can be levied from the
participants. The scheme is also entitled
to borrow money.

Contributions for banks are linked to
liabilities vs. clients. Special
contributions can be raised if the fund
falls below a certain limit.

26

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

(2) Entschaedigungs-
einrichtung deutscher
Banken GmbH

Fund (2) also
provides deposit
guarantee for banks.

GREECE (EL)

Athens Stock
Exchange Members’
Guarantee Fund

ADDITIONAL
SERVICES
• 90% of the claims
related to money,
€
up to a max. of
20.000 per invest.;
• 90% of the claims
to
related
securities, up to a
€
20.000
max. of
per investor

€

20.000

FROM THE COVER

The same

Investors listed in annex 1 of directive 97/9/EC
are excluded from the cover with the exception
of institutions providing investment services,
which are therefore covered.

Contributions are levied on the basis of a
formula which takes into account,
among other elements, the “RDR”
(reverse degree of risk) of each member
(related to a member’s own capital) and
the existence for that member of an
adequate level of “self-protection”
(assessed by the Guarantee Fund on the
basis of the member’s internal control
systems, management, connections with
other companies, etc.). Supplementary
yearly contributions are levied in case
the capital of the fund falls below a
certain desired level (related to the value
of the transactions on the Stock
Exchange).

27

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

ADDITIONAL
SERVICES

FROM THE COVER

intervention of

In case of a shortage of
funds,
additional contributions can be levied
the
through the
Capital Market
Committee. A
maximum amount for such additional
contributions was fixed. Borrowing
from any source is also possible,
repayment
for
through supplementary contributions

provided

being

Two funds for
investment firms
(name not available)

€

20.000

No additional services

Investors listed in annex 1 of directive 97/9/EC
are excluded from the cover.

SPAIN (E)

The answers are
based on the
content of the royal
decree.

28

the

value

held
by

the first year,

Contributions will be levied taking
into account the number of clients
and
and
of money
and will
instruments
be
the management
determined
company. For
the
contributions will be equal to at least
the 50% of the amount due by the
participating institutions. Topping-up
or third countries’ institutions will
contribute on the basis of agreements
between the management company
and the “home” scheme.

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

ADDITIONAL
SERVICES

FROM THE COVER

In case of a shortage of funds, the
company
management
levy
after
contributions,
additional
informing the supervisory authority.
Borrowing on account of the fund is
also possible.

can

€

€

€

(3) Fondo de Garantía
de Depósitos en
Establecimientos
bancarios

(4) Fondo de Garantía
de Depósitos en Cajas
de Ahorro

(5) Fondo de Garantía
de Depósitos en
Cooperativas de
Crédito

20.000

The same

The same

20.000

The same

The same

20.000

The same

The same

Funds (3), (4) and (5)
also provide deposit
guarantee for banks.

29

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

FRANCE (F)

N.A. The system is
bringing together all
the pre-existing
schemes (for deposit-
guarantee of credit
institutions and for the
French “Sociétés de
Bourse”)

The Fund also
provides deposit
guarantee for banks.

ADDITIONAL
SERVICES

€

€

70.000 for cash +
70.000 for financial
instruments. Part of the
compensation can be
paid through securities,
of the same kind and
value of those held by
the investment firm on
behalf of the investor.

FROM THE COVER

Investors listed in annex 1 of directive 97/9/EC
are excluded from the cover.

Claims coming from money laundering or from
other offences are excluded.

The Fund is going to issue certificates of
association which investment firms will
have to purchase. An annual interest is
going to be paid on the certificates. The
€
global (initial) amount of the issue is
10 million. The fund will also receive
the amounts paid by investment firms
for the breach of rules.

Ordinary and supplementary yearly
contributions are also levied, on the
basis of the amounts of funds and
instruments held by the institutions,
adjusted to take account of the
soundness of their “financial situation”
and costs.

In case the yearly contributions are not
enough to pay the compensation claims,
different mechanisms are envisaged to
establish how to use the fund’s reserves
and funds.

30

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

IRELAND (IRL)

(1) ICCL - Fund A

ADDITIONAL
SERVICES

(1) 90% of the claims
arising from investment
services, up to a max. of
€

20.000 per investor

FROM THE COVER

(1) Investors listed in annex 1 of Directive
97/9/EC are excluded from the cover. “Other
professional investors” can be excluded on the
basis of a declaration.

Claims coming from money laundering or from
other offences are excluded.

(2) ICCL - Fund B

(2) The same

(2) The same

(1) For Fund A, fixed and variable
yearly contributions are levied. Both are
based on the number of eligible clients.

(1) and (2) In case of shortage of funds,
the ICCL can borrow or raise money,
subject to the approval of the
supervisory authority.

(2) For fund B, fixed yearly
contributions are levied, based on the
type of business.

1) and (2) In case of shortage of funds,
the ICCL can borrow or raise money,
subject to the approval of the
supervisory authority.

ITALY (I)

Fondo Nazionale di
Garanzia

€

20.000 per investor

Investors listed in annex 1 of Directive
97/9/EC are excluded from the cover. The
category “other institutional investors” is not
defined.

Claims coming from money laundering or from
other offences are excluded.

Contributions are regulated in the
Statute. They consist of a fixed and a
variable amount, levied on a yearly
basis. The variable contribution is
related to profits and is determined by
the executive board, taking into account
the compensation claims received.

31

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

ADDITIONAL
SERVICES

20.000 per investor

20.000 per investor

FROM THE COVER

Investors listed in annex 1 of Directive 97/9/EC
are excluded from the cover, with the exception
of external auditors and their close relatives.

Investors listed in annex 1 of Directive 97/9/EC
are excluded from the cover. The category
“other institutional investors” is not defined.

Claims coming from money laundering or from
other offences are excluded.

20.000 per investor

The same as ICS

€

€

€

N.A.

According to the parliamentary proposal,
contributions can be levied, subject to a
max. amount per year.

The ICS is pre-financed by the
supervisory authority (SBN); the SBN
advances the funds; thereafter the fund
reimburses the SBN up to a max. of 25
mln. Dfl; any remaining amount, up to
another 25 mln. Dfl, is apportioned
between the participating institutions,
excluding banks; when necessary,
another 25 mln. Dfl can be levied from
all the institutions, including banks.

The CGS is pre-financed by the
supervisory authority (DCB);
contributions from banks are determined
ex post, in case a compensation claim
arises.

LUXEMBOURG
(L)

NETHERLANDS
(NL)

N.A.

Information is based
on the parliamentary
proposal.

(1) Investor
Compensation Scheme
of Securities
Institutions for Claims
of Investors (ICS)

(2) Collective
Guarantee Scheme of
Credit Institutions for
Repayable Funds and
Portfolio Investments
(CGS)

Fund (2) also
provides deposit
guarantee for banks.

32

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

AUSTRIA (ÖS)

(1) Einlagensicherung
der Banken und
Bankiers Gesellschaft
m.b.H.

(2) Sparkassen-
Haftungs
Aktiengesellschaft

(3) Österreichische
Raiffeisen-
Einlagensicherung reg.
Gen m.b.H.

(4) Schulze-Delitzsch-
Haftungs-
genossenschaft reg.
Gen. m.b.H.

€

€

€

€

ADDITIONAL
SERVICES

20.000 per investor

FROM THE COVER

Investors listed in annex 1 of Directive 97/9/EC
are excluded from the cover. The category
“other institutional investors” is not defined.

Claims coming from money laundering or from
other offences are excluded.

Derivatives on commodities are not covered.

Contributions are due only in case of a
default. Each member will contribute
according to the ratio of its commission
returns to total commissions returns.

If for major cases funding by one
scheme were not sufficient, other
schemes would have to contribute.

20.000 per investor

The same

20.000 per investor

The same

The same

The same

20.000 per investor

The same

The same

33

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

ADDITIONAL
SERVICES

FROM THE COVER

Funds (1)-(4) also
provide deposit
guarantee for banks.

(5) Hypo-
Haftungsgesellschaft
m.b.H.

(6) Entschaedigungs-
system der
Vermoegensverwalter

Investor Compensation
System

€

€

€

PORTUGAL (P)

20.000 per investor

The same

20.000 per investor

The same

The same

The same

25.000 per investor

Investors listed in annex 1 of Directive 97/9/EC
are excluded from the cover, with limited
exceptions. The category “other institutional
investors” is not defined.

In particular, the fund does not exclude:
• supranational institutions
• large companies

Claims coming from money laundering or from
other offences are excluded.

Some derivatives are not covered (commodities,
credit)

Contributions are due only in case of a
default. A percentage of the members’
commitments is covered by collateral.

Each member will contribute according
to the ratio of the amount of its clients’
money and securities to the total amount
for the system. A maximum annual limit
will be established.

In case of shortage of funds, the system
is entitled to borrow from banks; the
loans will be paid back with the
participants’ contributions during the
following years.

34

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

FINLANDE (FIN)

Investors’
Compensation Fund

ADDITIONAL
SERVICES

90% of the claims
arising from investment
services, up to a max. of
€

20.000 per investor

FROM THE COVER

Investors listed in annex 1 of Directive 97/9/EC
are excluded from the cover, with some
exceptions. In particular, certain investors (large
companies, experienced investors, etc. can be
excluded from the cover on an investor-by-
investor basis, if the investment firm and the
client agree.

There are two kinds of yearly
contributions: a fixed contribution, equal
for all the members; an additional
contribution, related to the services
provided, to the number of clients, to the
consolidated own funds of the
institution.

SWEDEN (S)

Deposit Guarantee
Board

The fund also
provides deposit
guarantee for banks.

€
250.000 SEK (
for each investor.

28.000)

Funds received by
securities institutions in
relation to investment
services are covered by
the Deposit Guarantee
Scheme.

Most types of investors are covered. Only
institutions providing investment services are
excluded.

Claims coming from money laundering or from
other offences are excluded.

At least half of the contributions are in
cash; half may be covered by insurance.

In case of a shortage of funds, the
scheme can borrow. The loan will be
paid back with the participants’
contributions during the following years.

The payment of a fee is envisaged. The
Board will establish detailed principles
for the calculation, taking into account
the amount of the protected assets.

In case of a shortage of funds, the
scheme can borrow from the National
Debt Office.

35

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

UNITED
KINGDOM (UK)

Investor Compensation
Scheme Ltd

ADDITIONAL
SERVICES
€
48.000 St. (

73.000)

That is, 100% of the
claim, up to a max. of
St. 30.000 per investor;
then 90% of the
following 20.000 St..

FROM THE COVER

Investors listed in annex 1 of Directive 97/9/EC
are excluded from the cover. The category
“other institutional investors” can be defined by
the ICS.

ICELAND (IS)

N.A..

€
1,7 ml. IC (

22.000)

Information is based
on the parliamentary
proposal.

Only institutions that participate in the fund are
excluded from the cover.

ICS does not levy the individual firms
directly, although it has the power to do
so. ICS levies each of the competent
authorities (IMRO, PIA, SFA) which, in
turn, levy the participant firms in
accordance with detailed rules, based on
supervision fees and number of
registered persons employed by the firm.

In case of a shortage of funds, the
scheme has a borrowing/overdraft
facility of St. 20 ml.. Also an interim
levy can be made, subject to a max.
amount per year. A problem of shortfall
of funds could, nonetheless, in theory
arise.

The contribution is based on securities
and cash held by the participating firm
and on the number of employees.

In case of a shortfall of funds, the
scheme can borrow from the “deposit
guarantee” fund up to a certain extent.

LIECHTENSTEIN
(LIE)

N.A.

N.A.

N.A.

N.A.

36

COUNTRY

SCHEME

LEVEL OF COVER

INSTITUTIONS/CLAIMS EXCLUDED

CONTRIBUTIONS

NORWAY (NOR) NO NAME OR
ADDRESS: the
guarantee must be
supplied by a savings-
or commercial bank,
an insurance company
or a financial
institution in the EEA
countries.

ADDITIONAL
SERVICES

200.000 NOK
€
(

24.000) per investor;

max: 25 ml NOK
€
(
firm

3 ml.) per investment

FROM THE COVER

Some professional investors are excluded
(investment firms, banks, insurance
undertakings and collective investment
undertakings).

Claims coming from money laundering or from
other offences are excluded.

The participants of each guarantee-
agreement are free to agree on the price
with the guarantee-provider.

No provision in the case that the
guarantee-provider has a shortage of
funds.

37