GICS aims to provide an effective and efficient compensation service for Gibraltar investors and helps maintain confidence in the financial sector.
Background
Investor Compensation Schemes protect investors by providing compensation in cases where an investment firm is unable to return assets belonging to an investor.
This might occur for example where there is fraud or negligence at a firm or where there are errors or problems in the firm's systems. It does not cover investment risk: for example, when an investor buys stocks that then fall in value.
In the EU, Investor Compensation Schemes are covered under a Directive dating back to 1997 (97/9/EC).
The Directive protects clients when they entrust money or financial instruments to an investment firm. Clients must be compensated by schemes in two situations derived from reasons directly related to the financial circumstances of the firm:
In Gibraltar
The Investor Compensation Scheme Act 2002 was passed by the House of Assembly on 14 June 2002 to give effect to EU Directive 97/9/EC which requires Member States to establish investor compensation schemes. The Act came into operation on the 24th July 2003.
It is a condition of an Investment firm's authorisation that the firm is a member of the Gibraltar Investor Compensation Scheme.
The Financial Services Act 2019 confers certain powers upon GICS, please refer to section 16 of the Act (Investor Compensation Scheme) : Click Here
What is GICS?
The Gibraltar Investor Compensation Scheme (“GICS”) is Gibraltar’s statutory ‘fund of last resort’ for customers of authorised investment firms. GICS exists to protect customers of financial services firms that have failed. If the company you’ve been dealing with has failed and is unable to return money or financial instruments that it holds on your behalf, we can step in to pay compensation.
You can find out more about the financial products we protect and learn more about what makes someone eligible under our Who & What is protected page.
