Investor Compensation Act, 1998

Provisions relating to restricted intermediaries.

36.—(1) In this section—

“receipted monies” means the value of client money or investment instruments forming part of the net loss of an eligible investor which were entrusted by the eligible investor to a restricted intermediary for transmission to an identifiable product producer from which the restricted intermediary held a valid written appointment at the time the money or investment instruments were so entrusted;

“restricted intermediary” means an investment firm which is or was—

(a) a restricted activity investment product intermediary, or

(b) an insurance intermediary which is not an authorised investment business firm (unless the investment firm is a restricted activity investment product intermediary),

or both and is not a member of a compensation scheme approved of under section 25 .

(2) A product producer from which a restricted intermediary held a valid written appointment shall pay to the Company, in respect of each eligible investor to whom the Company is liable to make a payment under section 34 in respect of that restricted intermediary, an amount which bears to the compensatable loss of each such eligible investor the same proportion as the receipted monies of the eligible investor intended for transmission to that product producer bear to the net loss of the eligible investor.

(3) Product producers shall be subrogated to the Company in respect of any claim of the Company against an investment firm in respect of monies paid to the Company by product producers under this section.

(4) Nothing in any contract shall limit or vary the liability of a product producer under this section.