Questions

1.   Who can claim?

2.   When can I claim?

3.   What documents are required?

4.   Where can I obtain the claim forms?

5.   Where can I submit the claim forms?

6.   Any time limit?

7.   Any charge incurred?

8.   How long will the assessment take?

9.   How will I be informed of the outcome of the claim?

10. Can I appeal?

11. What about my losses suffered years ago?




Answers

1. Who can claim?

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      clearing house
  •  An authorized automated trading services provider
  •  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.
  • 2. When can I claim?

    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, or

  •  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.

    3. What documents are required?

    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 statements,
    5. Deposit receipts for securities,
    6. Dishonoured cheque, and
    7. Hong Kong identity card or passport, or business registration.

    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.

    4. Where can I obtain the claim forms?

    A claim must be lodged with us in the form specified. The claim forms, completed 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.

    5. Where can I submit the claim forms?

    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 claim forms.

    6. Any time limit?

    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.

    7. Any charge incurred?

    We do not charge any fees relating to claims against the Investor Compensation Fund.

    8. How long will the assessment take?

    We 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 determination.

    9. How will I be informed of the outcome of the claim?

    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.

    10. Can I appeal?

    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.

    11. What about my losses suffered years ago?

    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 enquiries.