We refer to Paul Bonello’s article that was titled ‘Another bad financial deal (August 20).

The investor compensation scheme is committed to safeguarding the rights and interests of investors. The investor compensation scheme regulations (Legal Notice 368 of 2003) lay down that when the scheme makes payment to a claimant, it is to be subrogated to the rights and remedies of the claimant against the licence holder. Investors are to confirm in writing that their rights in respect of any money or instruments comprising their claim are to be subrogated in favour of the scheme.

The scheme has taken the view that it is equitable and appropriate that the subrogation should be equivalent to the amount of compensation paid to the claimant by the scheme. This interpretation, which is fairest to the claimant, is strengthened by the words used in the regulations, which require the subrogation to refer to any monies or instruments comprising the claim.

The intention of the regulations is clearly to protect investors and enhance confidence and not for the scheme to make a profit at their expense. So we once again wish to reassure claimants that investors who make a claim will be subrogating the scheme to the amount for which they are eligible to claim compensation and no more. Upon payment of compensation, the contract between the scheme and the claimant will clearly set out the limit of the subrogation and that any rights in respect of amounts in excess of what is paid by the scheme will remain vested with the investor.

The guidance in our website (www.compensationschemes.org.mt) made this abundantly clear even prior to the publication of the article in question.