What is Investor Compensation Fund by CySEC?
Ines Matkovich
Binary options traders can frequently read how CySEC regulated brokers are members of Investor Compensation Fund, and they tend to feel more protected that way. But what is Investor Compensation Fund by CySEC and can traders really get compensation in the easy and quick way? Read the article below to find out! Investor Compensation Fund... Read more
Binary options traders can frequently read how CySEC regulated brokers are members of Investor Compensation Fund, and they tend to feel more protected that way. But what is Investor Compensation Fund by CySEC and can traders really get compensation in the easy and quick way? Read the article below to find out! Investor Compensation Fund by CySec (ICF) is established as a special fund for clients of Cyprus Investment Firms (CIF’s) that are no credit institutions. Area of ICF’s activity is defined and regulated by a special directive. According to CySEC websites: “The purpose of the ICF is to secure the claims of covered clients against the ICF members through the payment of compensation if the necessary preconditions are fulfilled.” Who can to Apply for ICF Compensation? In order to apply for Investor Compensation Fund compensation, traders have to fulfill several requirements. Traders have to be non-professional investor-clients and natural or legal persons. They can also be a union of several persons or a “group of assets devoid of legal personality’ as CySEC explains on their website. Trade with 24option, CySEC regulated broker!  Traders who apply don’t have to be Cypriot citizens, as foreigners who reside in Cyprus can apply as well. also, Cypriots and residents who are residing abroad can apply. Traders should keep in mind that it is impossible to ask for a compensation if they are involved or convicted for a criminal offense for their transactions. This is a directive based on Prevention and Suppression of the Legalization of Proceeds from Illegal Activities Law of 2007 When can Traders Submit Request to the Investor Compensation Fund? Traders are always looking to trade binary options in a safe way and should always be precautious when it comes to managing the risk and avoiding it. Traders who are in compliance with requirements stated above can ask for a compensation when the company they were using for binary options trading (their binary broker), can’t fulfill its obligations. When the broker can’t fulfill obligations towards binary options trader it means that they are not able to return funds they owe to the client but are still keeping the funds to provide trading services to the covered client. Also, the binary broker (that is regulated as CIF), may not be able to return financial instruments that belong to clients, but still keeps them on its account and/or manages them. What is the Compensation Amount? Binary options traders who are requesting compensation by the ICF must keep in mind that maximum amount they can receive is €20,000. It is important to accentuate that it is the maximum compensation trader can receive when requesting a compensation against a member regardless of the number of accounts, currency, and place of provision of the service. Trade with 24option, CySEC regulated broker!  How does the Payment Process with CySEC Investor Compensation Fund Looks Like? First and foremost, CySEC has to make sure that CIF, or the binary broker, really is unable to fulfill all necessary obligations towards the trader. CySEC withholds the right for this process to be executed withing reasonable timeframe. Once CySEC is sure about the situation, it initiates a process for compensation payment by Investor Compensation Fund. CySEC may also ask the binary broker to provide an explanation and explain their point of view within a short period before finally deciding upon this action. This period is never shorter than three working days.  The complete decision-making process whether or not to initiate a compensation may last up to three months. Investor Compensation Fund Clients After CySEC announces the decision to initiate a compensation request, Investor Compensation Fund has to publish an invitation to covered clients to submit their applications. This invitation has to be published in at least 3 national newspapers that are distributed nationwide and traders must respect the submission deadline. The deadline for applications is usually between 5 and 9 months from the date of publishing the invitation. This deadline can also be extended up to 3 months, but only under special circumstances. All applications must include applicant’s name, address, phone, email address, code with the broker (account number), particulars of the covered services agreement between the trader and the broker, the amount any type of the alleged claims, and evidence of the stated claims and amount. Investor compensation fund can ask for additional information, again, by publishing a request in three national papers and official national Gazette. All applications are evaluated by at least one accountant and one experienced advocate. They recommend the acceptance or rejection of applications. The compensation amount for each applicant is calculated depending on several factors and terms. The payment deadline is three months. In order to fully understand how ICF works, we suggest reading Investor Compensation Fund information available on CySEC website. Also, make sure to ask you a lawyer for help if you believe you are entitled to a compensation. Trade with 24option, CySEC regulated broker! 

What is Investor Compensation Fund by CySEC?

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cyprus flag binary optionsBinary options traders can frequently read how CySEC regulated brokers are members of Investor Compensation Fund, and they tend to feel more protected that way. But what is Investor Compensation Fund by CySEC and can traders really get compensation in the easy and quick way?

Read the article below to find out!

Investor Compensation Fund by CySec (ICF) is established as a special fund for clients of Cyprus Investment Firms (CIF’s) that are no credit institutions. Area of ICF’s activity is defined and regulated by a special directive. According to CySEC websites:

“The purpose of the ICF is to secure the claims of covered clients against the ICF members through the payment of compensation if the necessary preconditions are fulfilled.”

Who can to Apply for ICF Compensation?

In order to apply for Investor Compensation Fund compensation, traders have to fulfill several requirements.

Traders have to be non-professional investor-clients and natural or legal persons. They can also be a union of several persons or a “group of assets devoid of legal personality’ as CySEC explains on their website.

Trade with 24option, CySEC regulated broker! 

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Traders who apply don’t have to be Cypriot citizens, as foreigners who reside in Cyprus can apply as well. also, Cypriots and residents who are residing abroad can apply.

Traders should keep in mind that it is impossible to ask for a compensation if they are involved or convicted for a criminal offense for their transactions. This is a directive based on Prevention and Suppression of the Legalization of Proceeds from Illegal Activities Law of 2007

When can Traders Submit Request to the Investor Compensation Fund?

Traders are always looking to trade binary options in a safe way and should always be precautious when it comes to managing the risk and avoiding it. Traders who are in compliance with requirements stated above can ask for a compensation when the company they were using for binary options trading (their binary broker), can’t fulfill its obligations.

When the broker can’t fulfill obligations towards binary options trader it means that they are not able to return funds they owe to the client but are still keeping the funds to provide trading services to the covered client.

Also, the binary broker (that is regulated as CIF), may not be able to return financial instruments that belong to clients, but still keeps them on its account and/or manages them.

What is the Compensation Amount?

Binary options traders who are requesting compensation by the ICF must keep in mind that maximum amount they can receive is €20,000. It is important to accentuate that it is the maximum compensation trader can receive when requesting a compensation against a member regardless of the number of accounts, currency, and place of provision of the service.

Trade with 24option, CySEC regulated broker! 

24option Post Type Banner

How does the Payment Process with CySEC Investor Compensation Fund Looks Like?

First and foremost, CySEC has to make sure that CIF, or the binary broker, really is unable to fulfill all necessary obligations towards the trader. CySEC withholds the right for this process to be executed withing reasonable timeframe. Once CySEC is sure about the situation, it initiates a process for compensation payment by Investor Compensation Fund.

CySEC may also ask the binary broker to provide an explanation and explain their point of view within a short period before finally deciding upon this action. This period is never shorter than three working days.  The complete decision-making process whether or not to initiate a compensation may last up to three months.

Investor Compensation Fund Clients

After CySEC announces the decision to initiate a compensation request, Investor Compensation Fund has to publish an invitation to covered clients to submit their applications. This invitation has to be published in at least 3 national newspapers that are distributed nationwide and traders must respect the submission deadline. The deadline for applications is usually between 5 and 9 months from the date of publishing the invitation. This deadline can also be extended up to 3 months, but only under special circumstances.

All applications must include applicant’s name, address, phone, email address, code with the broker (account number), particulars of the covered services agreement between the trader and the broker, the amount any type of the alleged claims, and evidence of the stated claims and amount. Investor compensation fund can ask for additional information, again, by publishing a request in three national papers and official national Gazette.

All applications are evaluated by at least one accountant and one experienced advocate. They recommend the acceptance or rejection of applications. The compensation amount for each applicant is calculated depending on several factors and terms. The payment deadline is three months.

In order to fully understand how ICF works, we suggest reading Investor Compensation Fund information available on CySEC website. Also, make sure to ask you a lawyer for help if you believe you are entitled to a compensation.

Trade with 24option, CySEC regulated broker! 

24option Post Type Banner

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