If you have an investment with a firm that has failed, you might be eligible to claim compensation with the Gibraltar Investor Compensation Scheme (“GICS”).
To qualify, there are some conditions that all need to be met:
The firm needs to have been authorised by the Gibraltar Financial Service Commission to carry out a type of regulated activity that GICS can protect - check this here.
The firm should no longer have enough funds to meet your compensation claim.
If a firm fails holding client money or assets in connection with a type of regulated activity that GICS can cover, we can compensate if there is a shortfall in your client money/assets.
The activity and product must have been regulated.
You must be an eligible claimant. Generally, the scheme is only available to certain types of investors, often referred to as “private” or “retail” investors.
Meaning of an Investor :
An investor is a person who has entrusted an investment to a participating firm in connection with investment business.
Eligible Investors :
An eligible investor is a customer of a failed investment firm. The Act excludes certain categories of investors such as professional or institutional investors and owners or managers of failed firms. Please click here for a definition of a professional or institutional investor (not protected by GICS)
How the scheme works
The scheme is activated upon one of the following occurrences found under Section 9 of the Act. Most likely, an authorised investment firm that has gone out of business and cannot return the eligible investors investments or money; and has been put into liquidation.
Does the scheme cover all types of investments
The scheme covers a broad range of investments sold by investment firms. These are sometimes called ‘investment instruments’. They include all the financial instruments listed under Section C of Annex I to the Markets in Financial Instruments Directive (MiFID): Please click here for a complete list
Some of the more commonly used investment instruments used by retail clients include:
Transferable securities;
Money-market instruments;
Units in collective investment undertakings;
Options, futures, swaps, forward rate agreements and other derivatives contracts relating to securities, currencies, interest rates or yields or other derivative instruments, financial indices of financial measures which may be settled physically or in cash;
Financial contracts for differences.
The following investment are not protected by the scheme:
Investment instruments falling outside the definition in the Section C of Annex I to the Markets in Financial Instruments Directive (MiFID);
Losses caused by a fall in the value of your investment because of market or other economic forces.
Life assurance products;
Pension products;
Investments arising out of transactions in connection with which there has been a conviction under the anti-money laundering legislation.
What does the scheme not cover:
Losses arising from bad investment advice, poor investment management or misrepresentation.
Losses caused by a fall in the value of your investment because of market or other economic forces.
If you deal with a firm that is not a member of the Investor Compensation Scheme.
The Scheme does not cover institutions and professional clients. Please click here for a definition of a professional or institutional investor
We can pay only 90% of the amount lost, up to a maximum of €20,000 to each eligible investor.
