The Central Bank of the Republic of San Marino announces that it has initiated a public consultation procedure on the following draft Regulations:
Regulations on the Investor Compensation Fund.
The measure aims to implement Article 100-bis of Law No. 165/2005 (so-called LISF), introduced in 2018 in transposition of Directive 97/9/EC on investor compensation schemes and fulfills international commitments arising from the Monetary Convention.
The measure introduces measures to protect investors, similar to what is provided for bank depositors, fitting into the broader framework of customer compensation and guarantee schemes and specifically complementing the regulatory framework concerning the securities and investment services sector, which was recently innovated with the issuance in late 2024 of BCSM Regulation No. 2024-05 on investment services and activities.
The main features of the draft measure under consideration can be identified in the following:
Any contributions to the consultation can be sent to the following e-mail address:
dipartimento.vigilanza@bcsm.sm,
stating "Investor Compensation Fund Regulations Consultation" as the subject of the e-mail.
Regulations on the Investor Compensation Fund.
The measure aims to implement Article 100-bis of Law No. 165/2005 (so-called LISF), introduced in 2018 in transposition of Directive 97/9/EC on investor compensation schemes and fulfills international commitments arising from the Monetary Convention.
The measure introduces measures to protect investors, similar to what is provided for bank depositors, fitting into the broader framework of customer compensation and guarantee schemes and specifically complementing the regulatory framework concerning the securities and investment services sector, which was recently innovated with the issuance in late 2024 of BCSM Regulation No. 2024-05 on investment services and activities.
The main features of the draft measure under consideration can be identified in the following:
- establishment at the Central Bank of the new "Investor Compensation Fund," under the regime of asset separation but not also of autonomous legal personality;
- mandatory membership in the Fund for all financial intermediaries providing investment services (investment service providers-PSIs), with the exception of those authorized exclusively for investment advisory services or falling among investment firms that do not hold, even temporarily, cash and financial instruments pertaining to clients;
- replenishment of the Fund by the member PSIs, with a consortium and solidarity approach and contribution of the individual PSI proportional to the total amount of the relevant protected investments in relation to the total protected investments in the system;
- maximum compensation limit per investor of €20,000, in line with the minimum protection set at the European level;
- no ex-ante contribution to the Fund, but only ex-post upon the occurrence of the so-called trigger event, i.e., the Administrative Compulsory Liquidation (ACL) of an investment service provider that, in the presence of asset confusion and insolvency, is unable to return to investors, at least in the short term, the financial instruments/liquidity pertaining to them, nor their economic countervalue;
- Establishment of an internal "Management Body" in Central Bank, composed of three members, one of whom is acting as chairman, appointed by the Board of Directors and responsible for screening and processing claims submitted by investors, quantifying and claiming (in cooperation with the Supervisory Department) contribution fees from member PSIs, and disbursing (in cooperation with the Treasury Department) compensation;
- absence of "management activity" at the head of the aforementioned Management Body, taking into account ex-post contributions, only in case of intervention and for the exact amount needed, withheld (on a dedicated, non-interest-bearing and free account, opened at the Central Bank) for the few days necessary for the printing/dispatch of T/Q checks in favor of the indemnified.
Any contributions to the consultation can be sent to the following e-mail address:
dipartimento.vigilanza@bcsm.sm,
stating "Investor Compensation Fund Regulations Consultation" as the subject of the e-mail.