EU proposes to amend the Depositor Guarantee Scheme Directive and the Investor Compensation Scheme Directive

As part of its work to create a safer and sounder financial system, prevent a future crisis and restore consumer confidence, the European Commission has proposed changes to existing European rules to further improve protection for bank account holders and retail investors. The Commission has also launched a public consultation on options to improve protection for insurance policy holders, including the possibility of setting up Insurance Guarantee Schemes in all Member States.

For bank account holders, the measures adopted by the EU mean that in case their bank failed, they would receive their money back faster (within seven days), increased coverage (up to €100,000) and better information on how and when they are protected.

For investors who use investment services, the Commission proposes faster compensation if an investment firm fails to return the investor’s assets due to fraud, administrative malpractice or operational errors, while the level of compensation is to go up from €20,000 to €50,000. Investors will also receive better information on when the compensation would apply and get better protection against fraudulent misappropriations where their assets are held by a third party. The proposals, which are fully in line with the EU’s commitments under the G20, are now passed to the European Parliament and the Council of Ministers for consideration.

More information is available at this link: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/918&format=HTML&aged=0&language=EN&guiLanguage=en

MFSA web site: http://www.mfsa.com.mt

Registry web site: http://registry.mfsa.com.mt

Consumer web site: http://mymoneybox.mfsa.com.mt