Investor Compensation Act, 1998
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Membership of compensation scheme by investment firm authorised in another Member State. |
40.—(1) In this section— | |
“client” means an investor who has, in connection with investment business, entrusted money or investment instruments to a branch established in the State by an investment firm in accordance with the provisions of Article 17 of the Investment Services Directive or in accordance with the provisions of Article 18 of Council Directive No. 89/646/EEC; | ||
“competent authority”, in relation to an investment firm, means a competent authority for the purposes of the Investor Compensation Directive in another Member State; | ||
“eligible investor” means a client of an investment firm who is entitled to compensation in accordance with Article 2 and the first paragraph of Article 7.1 of the Investor Compensation Directive and who has made an application for compensation within the meaning of Article 2 of that Directive; | ||
“investment business” has the same meaning as it has in the Investor Compensation Directive; | ||
“investment firm” means an investment firm within the meaning of subsection (2); | ||
“investor” has the same meaning as it has in the Investor Compensation Directive. | ||
(2) An investment firm (within the meaning of the Investment Services Directive) which is authorised in another Member State for the purposes of that Directive or of Council Directive No. 89/646/EEC of 15 December 1989 which has established a branch in the State in accordance with the provisions of Article 17 of the Investment Services Directive and which wishes to exercise the option of participating in investor compensation arrangements in the State in accordance with Article 7.1 of the Investor Compensation Directive, shall notify the Company accordingly and shall then be and become an investment firm for the purposes of this Act. | ||
(3) An investment firm shall supply all relevant information which the Company may request and shall pay a contribution to a fund maintained by the Company in accordance with subsection (4). | ||
(4) The contribution to be paid by an investment firm to the Company in accordance with section 21 shall be determined by the Company, with the agreement of the supervisory authority, on an annual basis, having regard to Article 7 and the guiding principles set out in Annex II of the Investor Compensation Directive. | ||
(5) The contribution to be paid by an investment firm to the Company in accordance with section 21 shall stand to the credit of the fund maintained by the Company which, in the view of the supervisory authority, most closely meets the requirements of the fourth paragraph of Article 7.1 of the Investor Compensation Directive. | ||
(6) Sections 27 , 28 , 31 , 32 and 33 shall not apply to an investment firm within the meaning of this section. | ||
(7) The amount payable under section 34 to an eligible investor in the case of an investment firm shall be an amount equal to the amount by which the eligible investor's compensatable loss relating to money or investment instruments entrusted by the eligible investor to a branch of the investment firm in connection with investment business exceeds the amount of compensation payable to the eligible Investor in accordance with Article 2 and the first paragraph of Article 7.1 of the investor Compensation Directive. | ||
(8) The Company shall make payment under subsection (8) as soon as practicable and at the latest within three months of the date on which the Company is informed by the competent authority of the amount of compensation payable to the eligible investor in accordance with Articles 2 and 7.1, first paragraph, of the Investor Compensation Directive, unless the competent authority agrees that payment may be made later than three months after that date. | ||
(9) Where an investment firm has not complied with its obligations under this Act, the Company shall inform the competent authority and the supervisory authority and may, with the consent of the competent authority, notify the investment firm that, with effect from a specified date, being a date not less than 12 months after the date of the notification, the Company shall not be liable to make payments under section 34 to clients of the investment firm in respect of money or investment instruments entrusted by clients to the investment firm after the date specified by the Company unless the investment firm has complied in full with its obligations under this Act within 12 months of the date of the notification. | ||
(10) If an investment firm does not comply fully with its obligations under this Act following a notification by the Company under subsection (9), the Company shall not, with effect from the date specified by the Company in accordance with subsection (9), be liable to make payments in accordance with section 34 to clients of the investment firm in respect of money or investment instruments entrusted by clients to the investment firm in connection with investment business after the date specified by the company. | ||
(11) Where an investment firm has not complied in full with its obligations under this Act within 12 months of the date of the notification referred to in subsection (9), the Company shall, on the expiry of that period of 12 months, inform the investment firm and clients of the investment firm that the Company shall not be liable to make payments under section 34 to clients of the investment firm in respect of money or investment instruments entrusted by clients to the investment firm in connection with investment business after the date specified by the Company in accordance with subsection (9). | ||
(12) Where an investment firm notifies the Company that it no longer wishes to exercise the option of participating in investor compensation arrangements in the State in accordance with Article 7.1 of the Investor Compensation Directive, the Company shall not, with effect from the date of such notification, be liable to make payments under section 34 to clients of the investment firm in respect of money or investment instruments entrusted by clients to the investment firm in connection with investment business after the date of such notification. |