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CySEC Investor Guide to the Investor Compensation Fund
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CYSEC INVESTOR GUIDE
to the Investor Compensation Fund
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The Investor Compensation Fund (ICF) was established pursuant to Law 144(Ι)/2007 for the protection of clients of Cyprus Investment Firms.
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ICF members include all Cyprus Investment Firms, some Investment Firm branches in Cyprus that are authorized by another EU Member State or a third country, some Alternative Investment Fund Managers, and some management companies.
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If you are a non-professional investor and an ICF member has not been able to repay the funds owed to you or return financial instruments to you, you may be eligible for compensation.
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After the Cyprus Securities and Exchange Commission (CySEC) has determined that a member appears for reasons directly related to its financial circumstances or due to a court ruling, to be unable to meet its obligations arising out of investors’ claims, the ICF will initiate the compensation payment procedure. They may also invite the ICF member to set out their views.
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The ICF will publish an invitation to submit applications for compensation in at least two national newspapers and CySEC on its website, with an appropriate deadline for the submission of applications that is 5-9 months after publication.
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Those who are eligible to make a compensation claim can do so on the CySEC website, in the section of Investor Protection. They can also submit a letter, accompanied by all supporting evidence, addressed to Investor Compensation Fund for CIF Clients, 19 Diagorou Str., 1097 Nicosia, Cyprus.
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Applications must include:
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the applicant’s name,
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the applicant’s address, telephone and fax numbers, and email address, if any,
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the applicant’s client code with the ICF member,
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the particulars of the covered services agreement between the ICF member and the applicant,
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the type and amount of the alleged claims,and,
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evidence giving rise to the alleged claims and their amount.
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Applications will be evaluated by a qualified accountant and at least one advocate with knowledge of capital markets issues. They will make a recommendation to the ICF’s Administrative Committee on whether the claim should be accepted in total or in part, or rejected.
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The maximum amount of compensation per claim is €20,000 and is defined as the lower of 90% of the cumulative covered claims of a covered client and €20.000. The amount of compensation payable to each covered client is calculated in accordance with the legal and contractual terms governing the relationship of the covered client with the ICF member.
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If the claim is related to financial instruments, compensation will be calculated according to their value on the day that CySEC publishes its decision to initiate the compensation payment procedure or, if relevant, when the court ruling on an ICF member is published.
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When valuation has been completed, the ICF will issue a decision listing the clients who are eligible for compensation and how much each is entitled to. This will be communicated to CySEC and the ICF member within five working days from its issue and to the affected clients the soonest possible from its issue.
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Clients will be paid compensation within three months from the date that the decision was communicated to the covered client.
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You may apply for compensation, regardless of whether you are a legal person, union of persons or group of assets with no legal personality, or whether you are a citizen of Cyprus. However, compensation is payable only to non-professional investors.
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If an ICF member loses their membership, the ICF will cover claims up to a year after membership has been removed.
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Before submitting an application to the ICF, please consult the Directive for full information on the conditions and legal framework of the ICF.
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 26 July 2022
 13:24
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