ARTICLE · 07 JANUARY 1999

Investor Compensation Act, 1998

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Johnny Johnson

The Investor Compensation Act, 1998 ('the Act') came into force on 1 August 1998. The Act's main aim is to protect certain clients of investment firms by maintaining an effective compensation scheme and by ensuring the proper and orderly regulation and supervision of investment firms and financial markets. The Central Bank is designated as the authorised supervisory authority under the Act.

The Act establishes the Investor Compensation Company Limited ('the Company') whose principle purpose is the establishment and maintenance of compensation arrangements for the benefit of certain clients of investment firms. Authorised investment firms (with limited exceptions) must make such contribution to the funds of the Company as the Company may specify. A failure to pay such monies can result in revocation of authorisation.

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