Investor Compensation Fund Policy
Crowd Tech Ltd (hereinafter “the Company”) is a member of the Investor Compensation Fund (the “Fund”) pursuant to Section 15 of the Investment Services and Activities and Regulated Markets Law L.87 (I) 2017 (the “Law”) which was established pursuant to Directive 97/9/EC, the obligations of the Fund are governed by the provisions of the Directive DI87-07 of 2019 of the Cyprus Securities and Exchange Commission for the Continuance of Operation of the CIF Investor Compensation Fund (the “Directive”), of which the Company is in compliance with the aforementioned Law and Directive.
Administration of the Fund
The Fund constitutes a private law legal entity and its administration is exercised by an Administrative Committee of five members, who are designated for a three-year term. The object of the Fund is to secure the claims of the covered clients against the members of the Fund by the payment of compensation for their claims arising from the covered services provided by its members, so long as failure by the member to fulfil its obligations has been ascertained.
Failure of the Company to fulfil its obligations toward its investors consists of its failure to:
(a) Either to return to its covered clients funds owed to them or funds which belong to them but are held by the member, directly or indirectly, in the framework of the provision by the said member to the said clients of covered services, and which the latter requested the member to return, in exercise of their relevant right;
(b) Or to hand over to the covered clients financial instruments which belong to them and which the member of the Fund holds, manages or keeps on their account, including the case where the member is responsible for the administrative management of the said financial instruments.
The amount of compensation toward investor-clients of Fund members shall be up to a maximum amount of twenty thousand Euro (€20.000) and the said coverage applies to the total amount of claims of an investor toward a Fund member, irrespective of the number of accounts, currency and place of provision of the service.
Covered Services
The Fund compensates the covered clients of the Company for claims arising from the covered services provided by the Company, as follow:
Investment services:
a) Reception and transmission of order in relation to one or more financial
instruments;
b) Execution of orders on behalf of clients.
Ancillary services:
a) Safekeeping and administration of financial instruments, including custodianship and related services;
b) Granting credits or loans to one or more financial instruments, where the firm granting the credit or loan is involved in the transaction; and
c) Foreign exchange services where these are connected to the provision of investment services.
Covered Clients
Subject to the provisions of Paragraph 24 of the Directive, the Fund does not compensate the clients who belong into the following categories:
(a) The following categories of institutional and professional investors:
- Investment Firms;
- Legal entities associated with the member of the Fund and, in general, belonging to the same group of companies;
- Banks;
- Cooperative credit institutions;
- Insurance companies;
- Collective investment organisations in transferable securities and their management companies;
- Social insurance institutions and funds;
- Investors characterised by the member as professionals, upon their request.
(b) States and supranational organisations.
(c) Central, federal, confederate, regional and local administrative authorities.
(d) Enterprises associated with the member of the Fund.
(e) Managerial and administrative staff of the member of the Fund.
(f) Shareholders of the member of the Fund, whose participation directly or indirectly in the capital of the member of the Fund amounts to at least 5% of its share capital, or its partners who are personally liable for the obligations of the member of the Fund, as well as persons responsible for the carrying out of the financial audit of the member of the Fund, such as its qualified auditors.
(g) Investors having in enterprises connected with the member of the Fund and, in general, of the group of companies, to which the member of the Fund belongs, positions or duties corresponding to the ones listed in paragraphs (e) and (f) above.
(h) Second-degree relatives and spouses of the persons listed in paragraphs (e), (f) and (g), as well as third parties acting for the account of these persons.
(i) Apart from the investors convicted of a criminal offence pursuant to the Prevention and Suppression of Money Laundering Activities Law, or, investors-clients of a member of the Fund responsible for facts pertaining to the member of the Fund that have caused its financial difficulties or have contributed to the worsening of its financial situation or which have profited from these facts.
(j) Investors in the form of a company, which due to its size, is not allowed to draw a summary balance sheet in accordance with the Companies Law or a corresponding law of a Member State.
In the cases of paragraphs (e), (f), (g) and (h), the Fund suspends the payment of compensation informing the interested parties accordingly, until it reaches a final decision as to whether such cases apply.
Payable Compensation Amount
To ascertain the claims of a claimant against a member of the Fund, as well as any counterclaims of the member of the Fund against the claimant, the books kept and the particulars issued by the member of the Fund as well as the supporting evidence produced by the claimant are taken into consideration.
The amount of the compensation payable to each covered client is calculated in accordance with the legal and contractual terms governing the relation of the covered client with the member of the Fund, subject to the set-off rules applied for the calculation of the claims between the covered client and the member of the Fund.
The valuation of the financial instruments pertaining to the compensation payable to the covered client is carried out based on their value at the day:
- of publication of the court;
- of publication of the decision of CySEC.
The calculation of the payable compensation derives from the sum of total established claims of the covered client against the member of the Fund, arising from all covered services provided by the member and regardless of the number of accounts, of which it is a beneficiary, the currency and place of provision of these services.
As the amount of the claim determined under this Regulation exceeds the amount of Twenty Thousand Euro (EUR 20.000), the claimant receives as compensation the lump sum of the amount of Twenty Thousand Euro (EUR 20.000).
Joint Account Beneficiaries
In the case whereby beneficiaries of a Joint Account of a member of the Fund are in their majority covered clients
(a) The maximum amount payable to all co-beneficiaries of the account comes up to Twenty Thousand Euro (EUR 20.000)
(b) The compensation is fixed on the whole for all co-beneficiaries of the joint account and is divided amongst them, in the way determined in the agreement between the co-beneficiaries and the member of the Fund; otherwise, in the absence of such agreement, it is divided equally amongst them.
For any further information regarding the Fund, contact the Company at compliance@trade360.com.