The services covered by the Fund are those defined in Article 4, paragraph (1), point 2 of Law 88/2021 regarding the Compensation Fund, with subsequent amendments and additions, which are eligible to be covered by the Fund in case the Fund participants could not return the financial funds and/or financial instruments owed or belonging to eligible investors for compensation, in relation to the provision of these services, and after meeting the conditions specified in Article 6, paragraph (1) of Law 88/2021.
The Fund compensates any financial instrument eligible for compensation according to the legislation in force, which the Fund participant could not return to the eligible investor after meeting the conditions specified in Article 6, paragraph (1) of Law 88/2021 and which was held by them based on the service contract.
An investor is any person (individual or legal entity) who has entrusted financial funds or financial instruments to an intermediary (financial investment services company or credit institution) for the purpose of investment services provision or to an investment management company for managing individual investment portfolios.
No. The legal framework applicable to the Investor Compensation Fund does not cover investment funds. Currently, compensation for FNI victims is handled by the Authority for the Administration of State Assets (AAAS).
When it was published in March 1997, Directive 97/9/EC regarding investor compensation schemes applied only to investment firms and did not include investment management companies (IMCs), because at the European level, collective investment schemes were regulated by a different legislative framework, namely Directive 85/611/EEC on the coordination of laws and administrative acts regarding certain collective investment schemes in transferable securities (UCITS). Following the entry into force in 2002 of Directive 2001/107/EC amending Directive 85/611/EEC to regulate investment management companies and simplified prospectuses, investment management companies could manage individual investment portfolios of investors (portfolio management was already an investment service defined in Directive 93/22/EEC - Investment Services Directive, but could only be provided by investment firms). Consequently, Directive 2001/107/EC stipulated that investment management companies authorized to provide this service must participate in an investor compensation scheme. In conclusion, for IMCs, the Fund does not compensate investors in investment funds but only compensates financial funds and instruments related to the management of individual investment portfolios.
The Fund compensates eligible investors equally and without discrimination, up to a maximum limit equivalent to 20,000 euros in RON, according to the provisions of Article 5, paragraph (1) of Law no. 88/2021. In the event that the Fund’s resources are deemed insufficient to meet the compensation obligations arising from a compensatory payment-triggering event, the Fund has the possibility to:
- Contract short-term loans to cover temporary needs generated by the payment of compensations;
- Collect, with ASF approval, special contributions, which cannot exceed 0.2% of the special contributions calculation base.
The financial resources of the Fund for paying compensations are composed of:
- The annual contribution and/or special contribution owed by the Fund participants
- Income from the recovery of compensated claims by the Fund
- Short-term loans to exclusively cover temporary needs generated by the payment of compensations.
No. The legal framework applicable to the Fund, specifically Article 7 of Law no. 88/2021, provides the categories of investors who are excluded from compensation.
