AGEFX INVESTOR COMPENSATION FUND
1. General
AGEFX (hereinafter, the “Company”) is a member of the Investor Compensation Fund
(“ICF”) for the Clients of Cyprus Investment Firms (“CIFs”), in accordance with the Investment
Services and Activities and Regulated Markets Law of 2017 (Law 87(I)/2017) which requires that a
CIF must be a member of an authorized investor compensation scheme in order to be allowed to
provide investment services.
2. Objective
The objective of the ICF is to secure claims of the covered Clients against members of the ICF,
through the payment of compensation in cases where the member concerned is unable, due to
its financial circumstances and when no realistic prospect of improvement in the above
circumstances in the near future seems possible. The ICF compensates the covered Clients for
claims arising from the covered services provided by its members, so long as failure by the member
of the ICF to fulfil its obligations has been ascertained, in accordance with the terms and procedure
defined in the Law, notwithstanding a relevant obligation by the member of the ICF in accordance
with the legislation and the terms which govern its agreement with the covered Client and
regardless of whether the said obligation of the member of the ICF is based on the agreement or
on wrongdoing.
3. Covered Services
Covered services of the Company are the investment services of (i) Reception and Transmission of
orders in relation to one or more Financial Instruments, (ii) Execution of Orders on behalf of Clients
and Safekeeping and administration of financial instruments, including custodianship and related
services offered by the Company.
4. Covered Clients
The ICF covers Retail Clients of the Company. It does not cover Professional Clients and Eligible
Counterparties. For more details see paragraph 5 below.
5. Non-Covered Clients
5.1. The ICF shall pay no compensation to individuals against whom criminal proceedings under
the provisions of the Prevention and Suppression of the Legalisation of Proceeds from
Criminal Activities Law of 2007, as amended or replaced, are pending.
5.2. Under Applicable Regulations, the ICF does not compensate the following investor
categories:
(a) The following categories of institutional and professional investors:
Investment Firms (IFs).
Legal entities associated with the Company and, in general, belonging to the same
group of companies.
Banks.
Cooperative credit institutions.
Insurance companies.
Collective investment organizations in transferable securities and their
management companies.
Social insurance institutions and funds.
Investors characterized by the Company as professionals, upon their request.
(b) States and supranational organizations.
(c) Central, federal, confederate, regional and local administrative authorities.
(d) Enterprises associated with the Company.
(e) Managerial and administration staff of the Company.
(f) Shareholders of the Company whose participation directly or indirectly in the capital of
the Company amounts to at least 5% of its share capital, or its partners who are
personally liable for the obligations of the Company, as well as persons responsible for
the carrying out of the financial audit of the Company as provided by the Law, such as
qualified auditors.
(g) Investors having in enterprises connected with the Company and, in general, of the
group of companies, to which the Company belongs, positions or duties corresponding
to the ones listed in sub-paragraphs (e) and (f) of this paragraph.
(h) Second-degree relatives and spouses of the persons listed in sub-paragraphs (e), (f) and
(g) of this paragraph as well as third parties acting for the account of these persons.
(i) Apart from investors convicted of a criminal offence pursuant to the Prevention and
Suppression of Money Laundering Activities Law of 2007, as amended or replaced,
investors-Clients of the Company responsible for facts pertaining to the Company that
have caused its financial difficulties or have contributed to the worsening of its financial
situation or which have profited from these facts.
(j) Investors in the form of a company which, due to its size, is not allowed to draw a
summary balance sheet in accordance with the Companies Law or a corresponding law
of a Member State of the European Union.
5.3. In the cases of sub-paragraphs (e), (f), (g) and (h) of paragraph 5.2., the ICF suspends the
payment of compensation informing the interested parties accordingly, until it reaches a
final decision as to whether such cases apply.
6. Compensation Payment Process
6.1. The ICF compensates the covered Clients for claims arising from the covered services pro-
vided by the Company, when failure by the Company to fulfil its obligations has been
ascertained (see also paragraphs 6.2., 6.3. and 6.4. below).
6.2. The following constitutes failure by the Company to fulfil its obligations:
(a) Either to return Client fund to its covered Clients which are held by the Company
indirectly in the framework of the provision by the Company to the said Clients of
covered services, and which the latter requested the Company to return, in exercise of
their relevant right; or
(b) To return to the covered Clients financial instruments which belong to them and which
the Company manages.
6.3. The ICF initiates the compensation payment process in one of the following situations:
(a) The Cyprus Securities and Exchange Commission (CySEC) has determined by resolution
that that the Company is unable to meet such of its duties as arise from its Clients’
claims in connection with the investment services it has provided, as long as such
inability is directly related to its financial circumstances with respect to which no
realistic prospect of improvement in the near future seems foreseeable, and has
issued its decision on the commencement of the compensation payment procedure
by the ICF as well as has published the said decision in the Official Gazette of the
Republic of Cyprus as well as on its website on the Internet.
CySEC can issue such decision when at least one of the following preconditions is
fulfilled:
(i) The Company submits to the ICF or to CySEC a written statement declaring its
failure to fulfil its obligations towards its Clients; or
(ii) The Company files an application for liquidation in accordance with the provisions
of Part V of the Companies Law of Cyprus; or
(iii)CySEC has revoked or suspended the Company’s authorization to provide
investment services and ascertains that the Company is not expected to be in a
position to fulfil its obligations toward its Clients in the near future, for reasons
which do not concern a temporary lack of liquidity which can be dealt with
immediately.
(b) A judicial authority has, on reasonable grounds directly related to the financial
circumstances of the Company, issued a ruling which has the effect of suspending the
investors’ ability to lodge claims against it.
6.4.
Upon issuance of a decision to initiate the compensation payment process by a Court or by
CySEC, the ICF publishes, in at least three (3) newspapers of national coverage, an invitation
to the covered Clients to make their claims against the Company. The invitation outlines the
procedure for submission of the relevant compensation applications, including the deadline
for submission and the content of such applications.
6.5.
The compensation applications of covered Clients with which they make their claims against
the Company are submitted to the ICF in writing and must include:
(i)
The name of the claimant-Client;
(ii)
The address, telephone and fax numbers as well as any email address of the claimant-
Client;
(iii) The Client code that the claimant-Client had with the Company;
(iv) The particulars of the covered services agreement between the ICF and the claimant-
Client;
(v) The type and amount of the alleged claims of the claimant-Client;
(vi) The exposition of the particulars from which the alleged claims of the claimant-Client
and their amount are delivered;
(vii) Any other information the ICF might or will request.
6.6. Upon submission of the compensation applications, the Administrative Committee of the ICF
has control especially if:
(i)
The claimant-Client falls within the category of covered Clients;
(ii)
The application was timely submitted;
(iii) The claimant-Client is not convicted of a criminal offence pursuant to the Prevention
and Suppression of Money Laundering Activities Law of 2007, as amended or replaced;
(iv) The conditions for the valid submission of compensation applications are fulfilled.
6.7. The Administrative Committee rejects the compensation application in case the claimant-
Client does not fulfil the conditions referred to in paragraph 6.6. above, or if at the
dministrative Committee’s discretion, at least one of the following reasons exists:
(i)
The claimant-Client used fraudulent means in order to secure the payment of
compensation by the ICF, especially if it knowingly submitted false evidence;
(ii)
The damage suffered by the claimant substantially derived from concurrent negligence
or offence on its behalf in relation to the damage it suffered and to its underlying
cause.
6.8. Upon completion of the valuation, the ICF:
(i)
Issues minutes listing the Clients of the Company which are compensation
beneficiaries along with the amount of money each one of them is entitled to receive,
and, communicates it to CySEC and the Company within five (5) working days from its
issue; and
(ii)
Communicates to each affected Client its finding no later than fifteen (15) days from
the issue of the aforementioned minutes determining the total compensation amount
this Client is entitled to receive.
7. Amount of Compensation
7.1. The amount of compensation payable to each covered Client is calculated in accordance with
the legal and contractual terms governing the relation of the covered Client with the
Company, subject to the rules of setoff applied for the calculation of the claims between the
covered Client and the Company.
7.2. The calculation of the payable compensation derives from the sum of total established claims
of the covered Client against the Company, arising from all covered services provided by the
Company and regardless of the number of accounts of which the customer is a beneficiary,
the currency and place of provision of these services.
7.3. The total payable compensation to each covered Client of the Company may not exceed 90
% (ninety per cent) of the cumulative covered claims of the covered investor, or the amount
of twenty thousand Euros (EUR 20,000), whichever is lowest, irrespective of the number of
accounts held, currency and place of offering the investment service.
7.4. In the case of joint investment business1:
(a) Each investor’s share in joint investment business shall be taken into account in
calculating the compensation provided in section 7.3 above;
(b) In the absence of special provisions, claims shall be divided equally amongst investors;
1 joint investment business’ shall mean investment business carried out for the account of two or more persons or
over which two or more persons have rights that may be exercised by means of the signature of one or more of those
persons
(c) Claims relating to joint investment business to which two (2) or more persons are entitled
as members of a business partnership, association or grouping of a similar nature which
has no legal personality may for the purpose of calculating the limits provided in section
7.4 (a), be aggregated and treated as if arising from an investment made by a single
investor.