All participants in the Investor Compensation Scheme are obliged to contribute a Fixed Contribution and a Variable Contribution.
The Fixed Contribution is paid to the Scheme annually, in every calendar year. For Category 2 investment firms, the Fixed Contribution is €2911.72 per annum. For Category 3 investment firms, the Fixed Contribution is €17,470.30 per annum. (In brief, these categories of investment firms are licensed to provide any investment service and to hold and control clients’ assets or monies.)
The Variable Contribution is not paid to the Scheme but accounted for and held by each firm until such time that the Committee makes a call on such funds. The Variable Contribution is calculated by applying a percentage rate on the total revenue of the investment firm on an annual basis. The percentage rate for the Variable Contribution is set at 0.1% per annum. The Variable Contribution is required to be held in a reserve (the Investor Compensation Scheme Reserve) and may be invested by the firm with a third party approved in writing by the Committee having regard to the need for prudence. Such third party shall hold the funds on pledge in favour of the Scheme and shall specifically acknowledge the rights of the Scheme as pledge, and shall notify the Scheme in writing accordingly. Participants may also pay the amount of the Variable Contribution directly to the Scheme, rather than hold the amount in a Reserve.
The Second Schedule of the Investor Compensation Scheme Regulations sets out in much further detail the contributions which investment firms are required to make to the Scheme.
The Financial Statements of the Investor Compensation Scheme provide a detailed account of the amounts which have been paid to the Scheme.