Client Funds Protection

Pursuant to the Law on Public Offering of Securities and following the DIRECTIVE 97/9/EC of the European Parliament and of the Council of March 3rd, 1997 on investor-compensation schemes, Investors Compensation Fund (ICF) was established in Bulgaria. The Fund guarantees payment of compensation to the clients of an investment intermediary (Forex/Securities Broker) by the raised money in the Fund, in the cases where the investment intermediary (Forex/Securities Broker) is not able to pay its liabilities to the client, due to reasons directly linked to its financial condition.

Any investment intermediary, which holds, administers or manages clients’ funds and/or financial instruments and for which, due to it, liabilities to clients may arise, is obligated to contribute pecuniary premiums in the fund. The failure to pay the premiums due by the investment intermediary shall not deprive the entitled clients of the investment intermediary of compensation up to the amounts, envisaged below.

The Fund shall pay compensations to the investment intermediary’s clients up to the amounts, envisaged below in the cases where:

1. By a decision of the respective district court bankruptcy proceedings have been instituted for the investment intermediary, including also when the bankruptcy proceedings have been terminated on the grounds of Art. 632 of the Commercial Code.
   
2. The license or the authorization has been withdrawn for pursuing the business of an investment intermediary, by a decision of the Financial Supervision Commission in the cases where the investment intermediary is in continuous deteriorating financial condition and cannot perform its operations.
   

Compensation shall be paid for the receivables that have arisen as a result of the inability of the investment intermediary to return the clients’ assets in compliance with the legal and contractual provisions. Clients’ assets shall mean the cash, financial instruments and other assets, of an investment intermediary’s clients, which the investment intermediary holds, administers or manages for their account in connection with the services provided under Art. 5, para (2) and (3) of the Markets in Financial Instruments Act, including interests, dividends and other such payments.

The Fund shall pay compensation to every client of the investment intermediary, at the rate of 90 percent of the amount of the receivable, but not more than:

• From 1 of January 2008 to 31 of December 2009 - EUR 15 000;
• From 1 of January 2010 - EUR 20 000.