Investor Compensation Act, 1998

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PART IV

Miscellaneous

Joint accounts and trustees.

37.—(1) Where—

(a) an eligible investor is a trustee making an application for payment under section 34 on behalf of a trust, and

(b) any beneficiary of the trust concerned is beneficially entitled against the trustees to any identifiable part of the amount so claimed, either absolutely or jointly with a fixed number of other beneficiaries,

then, the net loss in respect of which the trustee makes an application for payment under section 34 shall be treated, but only for the purpose of ascertaining a compensatable loss—

(i) where the beneficiary is entitled absolutely, as if legal ownership of the money and investment instruments which comprise the net loss had passed to the beneficiary,

(ii) where the beneficiary is entitled jointly with a number of other beneficiaries, as if the money and investment instruments which comprise the net loss were joint investment business maintained by the beneficiaries and legal and joint ownership had passed to the beneficiaries concerned.

(2) Where persons (being persons other than trustees or persons to whom subsection (1) applies) having, or treated by virtue of subsection (1) as having, joint ownership of money or investment instruments comprising a net loss are entitled to the money or investment instruments by virtue of their joint ownership of the monies or investment instruments, then, they shall, in the absence of special terms and conditions, each be treated, but only for the purpose of ascertaining a compensatable loss, as having a separate investment equal to the amount that would be produced by dividing equally the money and the value of the investment instruments concerned among the number of persons having joint ownership.

(3) Where two or more persons are entitled to money or investment instruments received, held, controlled or paid by an investment firm as members of a partnership, association or grouping of a similar nature, without legal personality (whether or not in equal shares), such money or investment instruments shall be treated as a single investment.

(4) The supervisory authority and, where necessary for the purposes of ascertaining a net loss, the administrator concerned may require any person claiming payment under section 34 to supply sufficient information to enable a decision to be made as to whether this section applies to such money or investment instruments.

(5) Where, in a case to which subsection (1) or (2) applies, a client's claim for payment under section 34 also relates to other money or investment instruments, that other money or investment instruments shall, for the purpose of ascertaining a net loss, be aggregated with any amount of money or investment instruments maintained by that person for the purpose of either or both subsections (1) and (2) and the compensatable loss so ascertained shall be divided and duly paid to the person concerned and either or both (as the circumstances may require) the trustees concerned and the said person jointly with others, in the same proportion or proportions as the amounts so aggregated bear to each other.