Financial inability shall be deemed to have arisen where insolvency proceedings are initiated against a member. The same applies where a credit institution licensed as an investment firm is placed under public administration; cf. The Guarantee Schemes Act, chapter 4.
Claims that are covered
a. Investment service
- The Compensation Scheme shall only provide cover for claims arising from a member’s handling of client assets and financial instruments.
You will find a listing of the Scheme’s members here
- It is important to note that compensation will only be payable if an investor deals with a firm which has been authorised by the Norwegian Financial Authority to provide investment services. The compensation scheme covers money and financial instruments held by the investment firm on behalf of clients as part of provision of licensed investment services.
- The right to compensation is dependent on a firm's financial inability. Financial inability shall be deemed to arisen only where insolvency proceedings are initiated against a member. The same applies where a credit institution licensed as an investment firm is placed under public administration, cf. The Guarantee Schemes Act, chapter 4.
- If you have a claim against a firm that is still trading, or has stopped trading but still is solvent, you must contact the firm about the matter.
Coverage is provided for up to NOK 200.000 per client in the event of financial
inability as mentioned above.
c. Who can make a claim?
Both legal and natural persons are entitled to make a claim. It is not available to a limited group of “professional investors”, and certain other exceptions mentioned in Securities Trading Regulations Section 9-38.
Even where a member has returned or had its licence revoked, the Scheme’s liability will encompass claims as mentioned above which arose prior to such return /revocation.
Claims that are not covered
- Fall in the value of an investment, resulting from market movements or adverse economic development etc. is not compensatable.
- Losses on securities, options and other financial instruments issued by the insolvent firm, are not covered.
- Losses stemming from poor or lacking advice, investment management or information are not covered.
- The scheme's decisions may be appealed to the Norwegian FSA.
Announcement and period allowed for reporting claims
- The Norwegian Investor Compensation Scheme will inform the clients that a member is financially inable in an appropriate manner. Notice will be published on the Norwegian Investor Compensations Scheme’s website, usually also by publishing notices in both a local and a national newspaper, advising clients of the member firm of their right to make a claim.
- Client claims must be filed with the Scheme within five months of such announcement.
- When submitting the claim, the claim ought to be in writing.