Investor compensation

Financial institutions that provide investment services are required by law to keep their own assets separate from the assets invested on behalf of their clients. If such institutions go bankrupt, their clients’ investments are safeguarded in a separate pool. This protects investors against, among other things, the bankruptcy of the institution. The Dutch Authority for the Financial Markets (AFM) supervises compliance with these rules.

If the rules on segregation of assets are not properly applied or are lacking, for example due to fraud or mismanagement, the failing institution may also drag the financial instruments and funds it manages for its clients into its bankruptcy. In that case, the institution may not be able to return your funds and financial instruments.
To compensate investors for such losses, the investor compensation scheme exists.

Please note: the investor compensation scheme does not protect investments with a company that has not received a license to provide certain investment services, including those that may only provide advice on financial instruments.

Not all types of investments are protected by the investor compensation scheme. Financial instruments and money are protected, but cryptos, for example, are not included in this definition.

Compensation up to € 20,000

If you are entitled to investor compensation, you will receive compensation of up to €20,000 per investor.
Do you hold a joint investment account with your partner? In that case, the maximum compensation is €40,000 jointly.

Does the Investor Compensation Scheme protect me if my asset manager goes bankrupt?

The investor compensation scheme provides protection if a financial institution that provides investment services, such as an asset manager, goes bankrupt and is unable to return its clients’ financial instruments and/or funds, even though it should.

This may occur, for example, if during the bankruptcy it turns out that the financial instruments managed for you are missing. Or if something went wrong in the management of the assets, causing your financial instruments and/or funds to be drawn into the bankruptcy of the institution and making repayment impossible.

Who is eligible for investor compensation?

The investor compensation scheme is available to private investors. Small enterprises that are permitted to publish a summary balance sheet are also eligible. There are specific exceptions, however.

Who is not eligible for investor compensation?

Certain persons and entities are not eligible for investor compensation. These are:

• Managing and supervisory directors, asset managers and personally liable partners of the investment firm in question.
• Individuals holding 5% or more of the capital of the investment firm in question.
• Professional market players and investors such as banks, insurers, pension funds and government bodies.

Dutch investor compensation scheme

The Dutch investor compensation scheme is available to investors who invest through a Dutch financial institution, such as a bank, an investment firm or a manager of investment institutions that is also allowed to manage individual portfolios. Financial corporations are banks, investment firms and investment fund managers that are also authorized to manage private assets. This can be a financial institution based in the Netherlands or a European branch of a Dutch financial institution.

Foreign investor compensation

Are your investments through an investment firm whose head office is in another country? Then they will usually be covered by that country's investor compensation. In all countries of the European Economic Area (EEA), which include all EU Member States, Norway, Iceland and Liechtenstein, investor compensation protects your investments and money up to €20,000. Some countries offer higher compensation. Often, banks and investment firms headquartered outside the EEA are subject to different schemes, but they have the option of joining the Dutch investor compensation scheme. You can ask your financial corporation which investor compensation applies.

Who funds the investor compensation scheme?

The Dutch investor compensation scheme is paid for by the financial institutions it covers. Together, they ensure that sufficient funds are available to compensate all affected investors up to €20,000 per investor. De Nederlandsche Bank (DNB) determines the claims of affected investors and ensures that the established compensation is paid out. DNB works together with Stichting Beleggers Compensatiefonds, which manages the funds needed to make the payouts. 

Supervision of investment services

Financial institutions providing investment services must segregate their capital from their customers’ invested assets. This protects investors against, among other things, the bankruptcy of the institution. The Dutch Authority for the Financial Markets (AFM) supervises compliance with these requirements. The AFM assesses whether financial institutions meet these obligations and seeks to intervene in a timely manner if asset segregation does not function properly. Read more about AFM supervision.

Money in your bank account is also protected

Money in your bank account is protected under a different scheme: the Dutch Deposit Guarantee Scheme. If a bank goes bankrupt, you will get your money back, from 1 cent to €100,000 per person per bank. Read more about the Dutch Deposit Guarantee Scheme.