PIA Update: The Investor Compensation Directive

United Kingdom

The Investor Compensation Directive

In Regulatory Update 59, PIA has explained the effect of the Investor Compensation Directive on its rules:

  • firms that issue or approve investment advertisements will need to ensure that they comply with the amended references to compensation in the rules;

  • firms are given until 26th March 1999 to amend their terms of business letters to indicate how further information on compensation can be obtained.

Until that date, investors must be provided with this information orally; and

  • firms should note that investment business transacted by an overseas branch using the passporting arrangements of the ISD will in future be covered by the ICS, and that branches in the UK of firms authorised elsewhere in the EU will be covered by the scheme of their home Member State, unless the cover in that State is less and the firm wishes to top-up its compensation cover to UK levels.