Investors' compensation fund contains just €39m
Published 13/11/2011 | 05:00
The recession has eaten into contributions made to the company set up by the State to pay compensation to investors if a large stockbroker or investment firm goes bust.
The €39m Investor Compensation Company Limited (ICCL) -- which is expected to pay compensation to some of the investors who lost money after Custom House Capital (CHC) went into liquidation earlier this month -- collected €5.2m from investment firms for its compensation fund over the last year.
This is about €500,000 -- or about nine per cent -- less than what the ICCL collected the previous year.
"In the past two years, economic circumstances have caused a decline in the number of investment firms and brokers," said Anne Troy, chief operations officer with the ICCL.
"Investment activity has also fallen. As a consequence, contribution income [to the ICCL fund] has fallen."
Last month, about 1,500 investors discovered they could be facing losses after CHC went into liquidation.
When asked if there was concern that the amount of money collected by the ICCL might not be enough to cover future compensation bills should a major firm go bust, Ms Troy described the impact of the fall in contributions to the ICCL fund as "marginal at present".
Sunday Indo Business