Cyprus Securities and Exchange Commission (CySEC)
Investor Compensation Fund (ICF)
CySEC says applicants need not be Cypriot citizens, that a valid claim is a precondition for compensation, and that the fund does not cover some applicants.
Brokers sometimes describe an insurance or compensation fund as a safety net for clients. Such funds differ from insurance and have strict conditions. This page summarises what CySEC publishes about its Investor Compensation Fund. It does not say which firms belong to it, and it does not assess any broker.
Who Can Apply
CySEC's page describes applicants widely. It states: "Applicants need not be Cypriot citizens." It adds: "Foreigners residing in Cyprus, as well as Cypriots or foreigners residing abroad, may also apply." Being allowed to apply is not the same as being paid; the next section explains why.
A Valid Claim Comes First
The page states: "The existence of a valid claim by the applicant is a basic precondition for receiving the compensation." A fund of this kind responds to a covered failure by a covered firm, not to a trading loss. The page also says the fund must pay eligible clients within three months after the list of beneficiaries is sent to CySEC, which shows that payment follows a formal process rather than starting automatically.
What the Fund Does Not Cover
CySEC says: "The ICF does not cover the applicants set out in the Second Schedule of the Directive." The page also excludes claims made more than one year after a former member loses its membership status. A firm that has left, or never joined, may therefore offer no route to this fund.
What This Means When a Broker Mentions a Fund
The CySEC page reviewed does not mention binary options, and this site does not state which brokers are members. If a broker claims fund protection, check the claim with the regulator named in its licence, using the steps in how to check whether a broker is regulated. For the UK equivalent, see the investor compensation scheme explained. For wider context, read binary options regulation explained and unregulated binary options brokers: risks regulators describe.
Frequently Asked Questions
Do applicants to the fund have to be Cypriot citizens?
CySEC states: "Applicants need not be Cypriot citizens."
Is applying the same as being paid?
No. The page states: "The existence of a valid claim by the applicant is a basic precondition for receiving the compensation."
Does the CySEC page say that binary options clients are covered?
The page reviewed does not mention binary options, so this page cannot say whether any binary options product would fall within the fund.
Does this page address whether an individual could face liability?
This page summarises what the regulators' published guidance says. It does not address whether an individual could face liability. Seek independent legal advice.
Sources and Official References
- CySEC: Investor Compensation Fund (ICF) (no date shown on the page)
This page summarises what the regulators' published guidance says. It does not address whether an individual could face liability. Seek independent legal advice.
This page summarises what the regulators' published guidance says. It does not address whether an individual could face liability. Seek independent legal advice.