Investors Compensation Scheme in the UK
The scheme began in 1988 after the British broke out a series of scandals related to financial mismanagement of funds of citizens to invest their savings in various institutions of the stock market. By April 1996 the scheme is declared insolvent 253 firms, and on it as kompenatsii was paid 103 million pounds, an average of 7 000 pounds for 1 investor. How is taking money for compensation? All licensed companies and funds are parties to the scheme and pay contributions. Even good companies are interested in this because scheme improves investor confidence, and they are more willing to carry out investments. Total contributions for the year from all companies and funds of approx. 100 million pounds. The scheme covers only those who have lost money since December 1986, and those who make contributions through a licensed investment institutions. The scheme does not provide guarantees for professional investors, medium and large companies and government organizations, Kotyrev themselves have the opportunity to focus on the stock market. Compensation is provided in the following cases:
1. In the event that the investment company or unit trust in its favor confiscate the funds entrusted to them by investors. Simply put, in case of theft. 2. In the event of failure of management of funds, caused the damage to investors. 3. In case the investor specialist sales or an independent investment adviser in the collective investment gave incorrect or careless recommendation.
Compensation Scheme becomes effective only on condition that the company is insolvent. Note that the scheme does not apply to bank deposits and building societies, because there are other independent circuit. Limit the amount of compensation under the scheme is 48 000 pounds per person per year. And from the first 30 feet of 000 is paid only 90%, forcing investors did not lose vigilance. The procedure for payment of compensation from the date of the request pending receipt of the money lasts an average of six months, although there are complicated cases, cases for which has been delayed for a few years.
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