With the enactment of the Securities and Futures Ordinance ("SFO") on 1 April 2003, a new compensation arrangement has taken effect. The Investor Compensation Company Limited ("ICC") was set up and commenced operation on 1 April 2003 under section 79(1) of the SFO to administer the Investor Compensation Fund ("Fund") established under the SFO.

The Fund has replaced the Unified Exchange Compensation Fund ("UECF") and the Commodity Exchange Compensation Fund ("CECF") since 1 April 2003. The UECF and CECF were previously managed by the Stock Exchange of Hong Kong Limited and the Hong Kong Futures Exchange Limited respectively, which covered the defaults of the exchange participants only. The Investor Compensation Fund is now a single fund that covers defaults of exchange participants and non-exchange participants including licensed intermediaries and authorized financial institutions.

The ICC is responsible for receipt, determination and payment of valid claims against the Fund in respect of defaults occurring on or after 1 April 2003.