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Yes. For defaults occurring on or after 1 January 2020, the total amount of compensation that can be allowed in relation to securities traded on the Stock Exchange of Hong Kong Limited ("SEHK"), and securities traded on the Shanghai Stock Exchange ("SSE") and the Shenzhen Stock Exchange ("SZE") and in respect of which an order for sale or purchase is permitted to be routed through the northbound link of a Stock Connect arrangement as a result of single default is raised from HK$150,000 to HK$500,000 per claimant. The limit of the compensation is also raised from HK$150,000 to HK$500,000 per claimant in relation to futures contracts traded on Hong Kong Futures Exchange Limited. For defaults occurring before 1 January 2020, a claimant will only be entitled to a maximum compensation of HK$150,000.
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The compensation limit is per investor. For a joint account, each of the account holders will be subject to a maximum compensation limit of HK$500,000.
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You are entitled to claim compensation because you are a "qualifying client" of the defaulting intermediary (i.e. you are the account holder of the securities account). Your spouse is not entitled to claim compensation because he/she is not the account holder in respect of your securities account.
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No. The compensation limit is per investor per single default. You are only entitled to compensation up to a maximum of HK$500,000, regardless of the number of securities account you are holding in the defaulting intermediary.
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Yes. But when calculating losses to be compensated to you, we will deduct the amount that you owe to the defaulting intermediary from your loss due to the default of the intermediary.
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Yes. Cash in an investor's securities account or futures contracts account at the defaulting intermediary is also covered under the ICF. But the cash should relate to the purchase or sale of securities or futures contracts.
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For defaults occurring on or after 1 January 2020, the ICF also covers investors' losses in relation to securities traded on the SSE and SZE and in respect of which an order for sale or purchase is permitted to be routed through the northbound link of a Stock Connect arrangement in addition to securities traded on SEHK. Therefore, we will take into account all the shares in your securities account (i.e. shares traded on the SEHK as well as shares traded on the SSE and SZE and in respect of which an order for sale or purchase is permitted to be routed through the northbound link of a Stock Connect arrangement) when calculating the losses in respect of the account.
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No. ICF is established to pay compensation to investors who suffer pecuniary losses as a result of a default of a licensed intermediary or authorised financial institution in relation to exchange-traded products in Hong Kong. For defaults occurring on or after 1 January 2020, the ICF also covers investors' losses in relation to securities traded on the SSE or SZE and in respect of which an order for sale or purchase is permitted to be routed through the northbound link of a Stock Connect arrangement. The ICF does not cover investors' losses resulting from other causes such as losses sustained as a result of the winding up of a listed company.
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No. Investors are not entitled to claim against the ICF in respect of their losses suffered as a result of trading securities relying on any advice received from any person or information from TV, newspapers or the internet.
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"Default" is defined in the Securities and Futures (Investor Compensation - Claims) Rules ("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 failure of providing the online trading service due to technical problems does not fall into the definition of default under the Claims Rules, and thus investors are not eligible to lodge a claim in respect of their losses arising from such incident.
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No. We will only pay your entitled compensation amount in cash. The amount of the compensation is calculated according to the closing prices of securities on the date of default.
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No. The compensation amount is calculated according to the closing prices of securities or futures contracts on the date of default. We will not make any adjustments to the compensation amount no matter whether the prices of the securities or futures contracts rise or fall after the date of default. Also, a claimant's compensation amount will not be reduced if the prices of the securities or futures contracts fall after the date of default.
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The collapse of ABC Brokerage Firm and the collapse of XYZ Brokerage Firm are two separate incidents. If you are a client of both ABC Brokerage Firm and XYZ Brokerage Firm, and you have suffered loss resulting from their collapse/default, you can file a claim in respect of the default of ABC Brokerage Firm, and you can also file a claim in respect of the default of XYZ Brokerage.
The maximum compensation amount you will receive in respect of the default of ABC Brokerage Firm is HK$500,000, and the maximum compensation amount you will receive in respect of the default of XYZ Brokerage Firm is still HK$500,000.
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You are eligible to claim compensation from the ICF regardless of your nationality or residency. It is preferably that the claimant completes the compensation claim form personally. The claimant should sign on the compensation claim form.
Please note that during the process of handling a claim, we may request the claimant to attend our office for an interview, and nobody can act for the claimant in this respect.
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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 following:
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,
7. Hong Kong identity card or passport, or business registration, and
8. Agreement relating to trading Stock Connect securities.
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 can provide sufficient evidence for us to process a claim promptly in case of intermediary defaults.
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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.
We pledge to issue and send an acknowledgement of receipt of the claim form to the claimants by post within 7 days of receipt. Claimants who do not receive an acknowledgement within 7 days should follow up with the ICC promptly.
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After we have made a determination in respect of your claim, we will inform you of the decision as soon as possible by issuing a notice of determination and state the reason(s) for the decision in the notice. The notice of determination is normally posted to your address as reported in the claim form. You will be given a reasonable opportunity of being heard if you are not satisfied with our 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.
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