Australian Money Forum

[Swanson Lois]

Recently, the regulatory authorities have made provision to compensate an investor who has suffered losses. A prominent commodities trading company has even welcomed it. In most instances, due to the negligence of the participants and/or the leniency involved in carrying out the highly important relevant instructions, losses may have occurred.

For any losses that the investor might incur, as a result of non-performance by the participant, certain amount of compensation has been suggested. However, it is subject to certain conditions. They are,
• The upper limit should be about 2.5 million dollars
• A trader can avail a comprehensive insurance policy whose details are as follows:
o Upper limit per claim should 5 million dollars
o Number of claims allowed: unlimited
o Minimum value of the claim is nearly 3500 dollars

Investor Protection Fund was set up to compensate an investor who has suffered losses and whose claims are subject to a limit of 3500 dollars. This fund is governed by a set of rules and regulations that have been put in place after several discussions and heated debates. The instructions follow certain rules and regulations and the main aspects include,

• Legitimate rights: As per Bye-law and Business Rules
• Bye-law: According to the availability of contingency funds
• Business Rule: It talks about the various provisions and conditions that governs the Investor Protection Fund
The updated information regarding the insurance cover is posted on the website and investors need to refer to it before investing large sums of money.