Investor Compensation Scheme: Who Qualifies and What You Get
Learn how this scheme protects your assets if a financial institution fails, and understand what it does and does not cover.
This scheme provides financial protection for individuals whose assets are held by a financial institution that has failed. It serves as a safety net for investors within the Netherlands to help recover lost holdings in specific circumstances.
Who it's for
This scheme is specifically designed for investors who have assets held by a financial institution that has failed. If the institution you use to manage your investments or hold your assets is unable to operate or has been declared failed, you may qualify for compensation through this framework.
What you get
The primary benefit of this scheme is the protection of your assets. If you qualify, you can receive compensation up to a maximum amount of €20,000 per investor. This is intended to help mitigate the loss of your holdings when a firm can no longer fulfill its obligations to you.
What it costs you
There is no cost to you to be covered by this scheme. The process is designed to be automatic, meaning you do not need to pay a fee or undergo a complex manual registration process to be eligible for the protection provided by the scheme.
The catch to know
It is important to understand the limits of this protection. This scheme is not a guarantee against market losses. This means that if your investments lose value because the market goes down, the scheme will not compensate you for those losses. It only applies to the failure of the financial institution itself, not the performance of your specific investments.
How to apply
- Continue to monitor the status of your financial institution to see if it has been declared failed.
- Because the process is automatic, you generally do not need to submit a formal application to trigger the protection.
- Keep detailed records of your holdings and asset statements from your financial institution to ensure your records match the official data.
- Check the official portal of the issuing body for any specific instructions if a failure is announced.