The Investor Compensation Fund ("Fund")
is established to pay compensation to investors
of any nationality who suffer pecuniary losses
as a result of a default of a licensed intermediary
or authorized financial institution in relation
to exchange-traded products in Hong Kong.
The objective of the Fund is to provide certain level of security to retail investors. If you were the client of a defaulting intermediary (i.e. you were the account holder of a securities or futures account, or accounts, at the defaulting intermediary), you are eligible to claim compensation in respect of the loss in your account resulting from the default of the intermediary. However, the following investors cannot claim against the Fund:
A licensed corporation
An authorized financial institution
A recognized exchange company, a recognized
exchange controller, or a recognized
An authorized automated trading services
An authorized insurer
A manager or operator of an authorized
collective investment scheme
An associate of the defaulting intermediary
which is a corporation
An employee of the defaulting intermediary
who has committed breach of trust, defalcation,
fraud or misfeasance
The Government or an overseas government
A person acting as a trustee or custodian
of the above persons, schemes or arrangement.
If you suffered pecuniary losses as a result
of defaults of intermediaries, you can file a
claim to the ICC.
Default is defined in the Securities and Futures
(Investor Compensation - Claims) Rules. It means
an intermediary, its employee or its associated
person is in bankruptcy, winding up, or insolvency,
or breach of trust, defalcation, fraud, or misfeasance.
The defaulting intermediary must be:
Licensed or registered for dealing in
securities or dealing in futures contracts, or
Licensed for securities margin financing,
An authorized financial institution
which provides securities margin financing.
In other words, all licensed brokerage firms
and banks that provide securities and futures
contracts trading services are covered.
The defaulting intermediary can be an organization
or an individual. Brokers is an example.
To substantiate your claim initially, you have
to submit copies of documents that the defaulting
intermediary has given or sent you about your
investments and account position. These might
include, but not limiting to the followings:
1. Account agreement,
2. Monthly account statements,
3. Contract notes,
4. Proof of payment such as pay-in slips and bank
5. Deposit receipts for securities,
6. Dishonoured cheque, and
7. Hong Kong identity card or passport, or business
The more evidence you can provide, the easier
it will be to deal with your claim. If you cannot
provide the required documents, or if further
information is required from you, we may contact
you for an explanation of events or submission
of further material.
Therefore, we suggest you to keep proper records
of the above documents, so that you could provide
sufficient evidence for us to process a claim
promptly in case of intermediary defaults.
A claim must be lodged with us in the form specified.
sample forms and relevant
rules can be downloaded from our website,
or can be obtained from the venues specified in
the Notice Inviting Claims published in local
newspapers pursuant to a default, or from the
ICC's or the SFC's offices.
The form must be completed, signed and accompanied
with the documents as specified in the form. The
completed form must be submitted to the offices
of the SFC or the ICC at the addresses specified
on the claim form or, if applicable, as specified
in the Notice Inviting Claims published in local
newspapers pursuant to a default.
We do not accept oral or on-line submission of
When it is appropriate
and necessary, the ICC may issue a Notice Inviting
Claims in at least one Chinese and one English
newspaper to invite claims regarding a particular
intermediary to be lodged with the SFC or the
ICC within the time specified, usually 3 months
from the date of the notice.
If no such notice has been published, you must
lodge your claim within 6 months after the day
you first become aware of the default. We may
disallow a claim lodged outside the deadline.
We do not charge
any fees relating to claims against the Investor
will process claims received as quickly as possible.
However, the determination process depends very
much on the complication of the default, investigation
and the legal process involved. Delay may also
occur if you cannot provide the full supporting
documentation. We will make payments to the allowed
claimants as soon as practicable following the
When we make a determination that the claim should
be allowed, disallowed or allowed in part, we
will inform you of the decision by issuing a notice
of determination. The determination notice is
normally posted to your address as reported in
the claim form. If the claim is disallowed in
full or is only allowed in part, you will be given
a reasonable opportunity of being heard. Reasons
for disallowance or allowance in part will also
be given in the notice of determination.
It is important that you keep us updated of any
subsequent changes in the information submitted,
such as change of address, contact phone number
or amendments to the amount of your claims, etc.
You should inform us in writing of these changes
and quoting your case reference number.
If you are dissatisfied
with the determination, you can submit your case
again to the ICC for further consideration either
in writing or in person to explain any further
evidence we should consider. The ICC may revise
the amount of compensation after further consideration
but if you are still not satisfied, you have the
right to lodge an appeal with the Securities and
Futures Appeals Tribunal within 21 days after
the service of the revised Notice of Determination.
The Investor Compensation Fund only covers defaults
arising on or after the date of the commencement
of the Securities and Futures Ordinance, that
is, 1 April 2003.
All claims relating to defaults occurring before
1 April 2003 had been processed by the Stock Exchange
or the Futures Exchange, as the case may be, and
governed by the provisions in Part X of the repealed
Securities Ordinance or Part VIII of the repealed
Commodities Trading Ordinance relating to the
Unified Exchange Compensation Fund or the Commodity
Exchange Compensation Fund respectively.
You may also contact Hong Kong Stock Exchanges
and Clearing Limited at 2522-1122 to make further