Investor Compensation Fund Policy

Introduction

NSBroker is a member of the Investor Compensation Fund for clients of Cyprus Investment Firms (CIFS) and other companies that operate in accordance with the Law 144/2007; it also participates in the creation of a compensation fund for clients under the rules described in the CIFS status of 2001.

The Fund’s Object

The Fund is a legal structure, under the management of the Administration consisting of 5 people. Each of them is selected for 3 years. The main purpose of the Fund is to create a special fund that would cover compensation payments to traders, provided that one of the following conditions is fulfilled:

  1. The Securities Commission and other organizations that are members of the Fund shall proceed to perform their duties with respect to the Client if the situation is directly related to its financial activities in the regulated sector, and there is no basis to assume that there is an immediate possibility of a payment.
  2. Reasonable arguments connected with the financial liabilities signed by the Fund, which, in its turn, has the right to prevent the Customer's claims against the Company.

The compensation amount issued by the Fund cannot exceed 20,000 euro. This requirement is relevant for a single trader, regardless of the number of accounts, currencies and service locations.

Compensation to customers

The Fund extends its activities to any clients, with the exception of the following:

  • Professional investors (investment firms, banks, insurance companies, credit institutions, social insurance funds) and other legal entities associated with the Company;
  • State organizations;
  • Federal, regional and local authorities;
  • Administration and the staff of the Company;
  • Joint-stock groups, whose share in the Company is at least 5%;
  • Investors working in branches associated with the Company;
  • Relatives of the second degree, spouses, third parties acting with permission;
  • Investors whose transactions are inconsistent with the current legislation;
  • Companies that cannot conduct a consolidated balance sheet.

Compensation services

The Fund reimburses the Customer for the following categories of services:

1. Investment – the claims related to the specification of the instrument, the order of the Client, or the Client’s account.

2. Auxiliary – granting loans, course services, storage and financial management.

Amount of compensation

To unambiguously and accurately determine the Client's claim to the Company, it is necessary to provide information, as well as provide evidence that must be taken into account in the process of considering a particular issue. The amount of compensation is calculated on the basis of legal and regulatory documents that are used to review the obligations between the Client and the Company.

The valuation of the compensation instrument is calculated at the time of:

  • Publication of court decisions, which have the power to prohibit an investor from filing lawsuits against the Company.
  • Publication of CySec's decision that at the moment the company is not able to meet the financial requirements with respect to the Client.

To calculate the amount, a reasonable application of the Client is accepted. However, if the estimated amount exceeds EUR 20,000, the applicant can receive a lump sum payment of only EUR 20,000, which is the maximum amount of compensation within the Fund.

Trading CFDs implies a big risk to your capital.