Brussels, 9 February 2009
Financial services: Commission launches call
for evidence on review of Investor Compensation Schemes
The European Commission has launched a call for
evidence on the review of the application of the Investor Compensation Schemes
Directive (Directive 1997/9/EC). This Directive aims to protect investors
against the risk of losses in the event of an investment firm's inability to
repay money or return assets held on behalf of their clients. The Commission now
wishes to gather information about the application of the Directive. All
interested stakeholders, in particular businesses, investors and consumers, and
public authorities are invited to participate. This call for evidence is also in
line with parallel initiatives concerning the Deposit Guarantee Schemes
closing date reply is 8 April 2009.
Internal Market and Services Commissioner Charlie McCreevy said: "We want
to gather information on the practical application of the Investor Compensation
Schemes Directive since it entered into force ten years ago, especially in light
of the current financial crisis. This will help us to assess whether and how the
Directive should be modified in order to better protect investors. I encourage
all interested parties to give us their views."
Issues addressed by the call for evidence
This call for evidence is focused on the following issues:
- the scope of the Directive in terms of services covered, also in the light
of the implementation of Directive 2004/39/EC on markets in financial
- the amount of compensation;
- the funding of the compensation schemes which represents a crucial part of
the functioning of the mechanism;
- some technical aspects which may hamper the efficient and timely functioning
of the schemes (notably, any existing restrictions on the carrying of unpaid
reimbursement debts over a certain period of time and the need to set effective
reasonable deadline for reimbursement).
Finally the call for
evidence considers issues related to the treatment of money market funds.
About the Investor Compensation Schemes Directive
The main purpose of the Directive is to protect investors' money and
financial instruments in the case where insolvency or default events result in
the inability of an investment firm to return them to (essentially retail)
investors. The schemes therefore protect investors' assets against the risk of
fraudulent misappropriation. They may also provide protection where the loss of
investor assets in the event of a firm default derived from errors, negligence
or problems in the firms' systems and controls.
This Directive had been modelled on the Deposit Guarantee Schemes Directive
which set minimum rules for compensation of customers of credit institutions
that fail. The Directive only contains the minimum harmonisation necessary to
achieve the objectives being pursued.
The consultation is available at:
Comments should be sent to the following e-mail address: