Funds.
Neutral Assistance and Protection
The Ficom was established as an impartial, third-party committee dedicated to reviewing and resolving complaints quickly and fairly. Beyond offering a swifter alternative to traditional regulators and legal proceedings, the Ficom provides a transparent environment that fosters trust among market participants.
How does it work?
The Compensation Fund acts as a form of insurance for clients of member firms. It is only used if a member refuses to comply with a final ruling issued by the Ficom, ensuring that eligible complainants receive fair redress.
What is the maximum coverage?
The Compensation Fund will cover valid judgments of up to €20,000 per client, offering a significant layer of protection while maintaining prudent risk management for all parties.
How is Compensation Fund financed?
The Ficom allocates 10% of each member’s monthly dues into a separate bank account dedicated to the Compensation Fund. This structure guarantees that allocated funds are reserved exclusively for claim payouts and cannot be used for operational expenses.
Who is covered?
The fund does not extend to losses incurred through self-directed trading, nor does it apply to a member’s entire client base in the event of the member’s insolvency. This targeted scope ensures that only legitimate claims, ruled on by the Ficom, qualify for coverage.
Overview of Ficom's Compensation Fund: Procedures, Challenges, and Limitations in Claims Handling.
Fund Shortages
The Compensation Fund is continuously maintained to ensure sufficient resources for valid claims. If a shortage occurs, the Ficom may consider supplementary measures or sources of funding to uphold its obligation to compensate eligible complainants.
Compensation Decisions
Following a final ruling and any change in a Member’s status, the Ficom will distribute compensation to the complainant within 90 days. During this period, the Ficom makes every effort to secure payment from the Member directly while verifying the complainant’s personal information to ensure a proper payout.
Usage Restrictions
The Compensation Fund is specifically designated for judgments issued by the Ficom. It excludes losses from self-directed trading and certain other scenarios defined by the Commission’s rules, preserving the fund’s integrity and ensuring that compensation is only provided in clear, validated disputes.
The Compensation Fund is continuously maintained to ensure sufficient resources for valid claims. If a shortage occurs, the Ficom may consider supplementary measures or sources of funding to uphold its obligation to compensate eligible complainants.
#Fund Shortages