Investor Compensation Act, 1998

Determination that an investment firm cannot meet its obligations.

31.—(1) Where it appears to the supervisory authority that an investment firm is unable for the time being, for reasons which are directly related to its financial circumstances, to meet its obligations arising from claims by clients and to have no reasonably foreseeable opportunity of being able to do so, the supervisory authority shall serve notice on the investment firm that it proposes to make a determination to that effect.

(2) An investment firm which has been informed by the supervisory authority that the supervisory authority proposes to make a determination in accordance with subsection (1) may, within three weeks, appeal to the Court against the proposal of the supervisory authority and the Court may allow or disallow the appeal.

(3) Where there has been no appeal or the Court has disallowed the appeal under subsection (2), the supervisory authority may make a determination within the meaning of subsection (1).

(4) In making a determination in accordance with subsection (3), the supervisory authority shall have regard to—

(a) any report of an authorised officer,

(b) any report of an authorised officer which indicates that a director, manager or shareholder of the investment firm has been unable, having been given reasonable notice to do so, to produce evidence of the existence of the assets and liabilities of the investment firm, or

(c) any other information in the possession of the supervisory authority.