Boom.com, Hong Kong online stockbroker and expanding
financial services portal for retail investors, has launched
a Deposit Insurance Protection (D.I.P.) scheme designed to protect assets held
in individual accounts. As of now, all existing and future client accounts are
covered by D.I.P.
The D.I.P. scheme was developed by a coalition of Standard & Poor's A- rated European insurance companies, which includes syndicates at Lloyds of London. This global policy protects clients' personal account holdings regardless of their geographical location, in the unlikely event of a broker default, for up to US$20,000 (HK$156,000) per account.
The insurance policy covers assets held by Boom on behalf of its private accounts in the eight markets encompassed by the broker's trading. These are Australia, Hong Kong, Indonesia, Japan, Philippines, Singapore, Thailand and the US. Investor compensation is ensured within 30 days of proof of claim. US$5,000 is deductible from each account, but both cash and securities are insured. The D.I.P. scheme does not cover professional investor or corporate accounts.
Mark Duff, chief executive of Boom Securities, said in a statement: 'The safekeeping of personal funds at brokers is a deeply rooted concern for all retail investors in Asia. Given the quality of the underwriters, we believe this policy establishes a benchmark for non-US headquartered securities firms in the region.'
Outlining other insurance policies in the Asian markets, he continued: 'There is a Bankers' Blanket Bond in the market, but it only covers fraud, not default. The other policy in the market is similar to the HKEX members fund and it is capped at a total of US$2,565,000 (HK$20,000,000) for all accounts combined, which means about US$50 (HK$400) per customer for a firm with 50,000 accounts......D.I.P. is a much-needed step beyond existing protection schemes and is a graphic demonstration of Boom's pioneering approach to developing and enhancing retail investors online experience.'
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