Investor Compensation Act, 1998

Establishment of fund.

19.—(1) The Company shall establish and maintain a fund or funds out of which payments shall be made in accordance with this Act to clients of investment firms and may establish and maintain in respect of specified classes or categories of investment firms particular funds in accordance with this Act.

(2) A fund shall not be established by the Company unless it has been approved of by the supervisory authority.

(3) The supervisory authority shall not approve of the establishment of a fund unless it is satisfied that the approval is not liable to prejudice the operation of any other funds maintained by the Company or by an investor compensation scheme approved of under section 25 .

(4) The supervisory authority may, following consultation with the Company, revoke the approval of the establishment of a fund or funds under subsection (2) where the supervisory authority considers that conditions have materially changed since the granting of the approval such that, if approval for the establishment of the fund were sought at that time, a different decision would be taken in relation to the approval.

(5) The supervisory authority may, when approving of a fund under subsection (2) or subsequently, impose conditions or requirements on the Company.

(6) Conditions or requirements imposed under subsection (5) may relate inter alia to the fund or funds maintained by the Company or to such other matters as the supervisory authority may consider appropriate.

(7) Where funds are credited by the Company to a fund established in respect of a particular class or category of investment firm, those funds shall be used exclusively for making payments to clients in accordance with section 34 in respect of those investment firms and no other.

(8) Notwithstanding subsection (7), where the Company, having consulted the supervisory authority, considers it appropriate to do so, the Company may make payments from a fund maintained to make payments in respect of a class or category of investment firm in order to meet its obligations under this Act in respect of other investment firms, subject to such payments being repaid from the assets of the fund or funds maintained by the Company to make payments under section 34 in respect of such other investment firms, together with payment of interest on the amount of such payments at a rate of interest to be determined by the Company.