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Hong Kong SFC Launches Investor Compensation Fund

by Mary Swire, Tax-News.com, Hong Kong

31 August 2006


Hong Kong's Securities and Futures Commission announced this week that investors suffering losses due to defaults by licensed or registered intermediaries, securities margin financiers and banks can now claim up to $150,000 through the Investor Compensation Fund Company.

In its latest Dr Wise column, published on Tuesday, the SFC described "default" as meaning any situation in which an intermediary, its employee or its associated person is in bankruptcy, wound up or insolvent or has committed breach of trust, defalcation, fraud or misfeasance.

The maximum claim is capped at $150,000 for both securities and futures products traded on the Stock Exchange of Hong Kong and the Hong Kong Futures Exchange. Both margin clients and cash clients are entitled to compensation if their intermediaries default.

The commission explained that investors lodging claims need documents such as the client agreement, their latest account statements, contract notes, proof of payment, and deposit receipts for securities. The more evidence a claimant can provide, the easier it will be to deal with the claim.


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