Brussels,

Investor compensation schemes

​The directive on investor compensation schemes, adopted in 1997, aims to protect investors by providing compensation when investment firms fail to return their assets.

​This protection is activated typically in cases of fraud, administrative malpractice, or operational failures by investment firms. However, the directive does not cover investment risk, such as the loss of value in purchased stocks.

Key Provisions

• Compensation: The directive mandates a minimum compensation level of €20,000 per investor.
• Membership: All firms offering investment services must be part of an investor compensation scheme.
• Coverage: Compensation claims are valid in scenarios involving fraud or administrative failures but not for market-related investment losses.

Policy Documents
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• Executive Report (1 February 2005): Evaluation of the investment compensation scheme directive. Link to document