Investors Compensation Fund
Pulp International Business Ltd FxPulp (the Company) is a member of the Investor Compensation Fund for Customers of Cypriot Investment Firms (CIFs) and other Investment Firms (IFs) which are not credit institutions (the Fund).

The Fund was established under the Investment Firms (IF) Law 2002 as amended (the Law) and the Establishment and Operation of an Investor Compensation Fund for Customers of CIFs Regulations of 2004 (the Regulations) which were issued under the Law.

The Fund constitutes a private law legal entity and its administration is exercised by an Administrative Committee of five members, who are designated for a three-year term. The Fund has been operating since 30 May 2004.

Objective
The object of the Fund is to secure any claims of covered clients (See Section D below) against members of the Fund and the Fund exists to compensate covered clients (See Section D below) for any claims arising from the failure by a member of the Fund to fulfil its obligations regardless of whether that obligation arises from legislation, the client agreement or from wrongdoing on the part of the member of the Fund.

A failure to fulfil its obligations consists of the following:

  • A failure to return to a covered client (See Section D below) funds owed to them or funds which belong to them but are held by a member of the Fund, directly or indirectly, in the framework of the provision by the member of the Fund to the client of a covered service and which the client has requested that the member of the Fund returns in exercise of their relevant right;

    OR
  • A failure to hand over to a covered client (See Section D below) financial instruments which belong to them and which the member of the Fund holds, manages or keeps on its account, including the case where the member of the Fund is responsible for the administrative management of the said financial instruments.

The payment of compensation which will be initiated where:

  • The member of the Fund is unable to meet client claims provided that this inability is resultant from its financial circumstances which show no realistic prospect of improvement in the near future;

    OR
  • A judicial authority has on reasonable grounds directly related to the financial circumstances of the member issued a ruling with the effect that investors ability to lodge claims against it are suspended.

A well founded claim by the client against the member must exist.

Covered Services
Covered Services are the services listed on the Company's license (095/08) issued by CySEC (Cyprus Securities and Exchange Commission).

Covered Clients
All FxPulp clients are covered by the Fund unless they fall within the following categories:

  1. The following categories of institutional and professional investors:

    a) Investment Firms

    b) Legal entities associated with FxPulp and, in general, belonging to the same group of companies

    c) Banks

    d) Cooperative credit institutions

    e) Insurance companies

    f) Collective investment organizations in transferable securities and their management companies

    g) Social insurance institutions and funds

    h) Investors characterized by FxPulp as professionals
  2. States and supranational organizations.
  3. Central, federal, confederate, regional and local administrative authorities
  4. Enterprises associated with FxPulp Managerial and Administrative staff
  5. Shareholders of FxPulp whose participation directly or indirectly in the capital of the member of the fund amounts to at least 5% of its share capital, or its partners who are personally liable for the obligations of the member of the Fund, as well as persons responsible for the carrying out of the financial audit of the member of the Fund as provided by the Law, such as qualified auditors
  6. Investors having in enterprises connected with FxPulp and in general of the group of companies to which FxPulp belongs, positions or duties corresponding to the ones listed in paragraphs 5 and 6 above
  7. Second-degree relatives and spouses of the persons listed in paragraphs 5, 6 and 7 as well as third parties acting for the account of these persons
  8. Apart from investors convicted of a criminal offence pursuant to the Prevention and Suppression of Money Laundering Activities Law of 1996 -2000, investor-clients of FxPulp responsible for facts pertaining to FxPulp that have caused its financial difficulties or have contributed to the worsening of its financial situation or which have profited from these facts
  9. 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.

Prerequisites for Initiating the Compensation Payment Procedure
The Fund initiates the compensation payment procedure when at least one of the following prerequisites is fulfilled:

  • The Cyprus Securities and Exchange Commission has determined that the Company is for the time being unable to meet its obligations arising from its investors-customers claims, in connection with the covered services it has provided, as long as such inability is directly related to the Company's financial position which has no realistic prospect of improvement in the near future,

    OR
  • A Court, based on grounds directly related to the financial position of the Company, has made a ruling which has the effect of suspending the investors-customers ability to lodge claims against the Company.

Upon issuance of a decision by the Cyprus Securities and Exchange Commission or by the Court in accordance with paragraph (a) or (b) above respectively, on the commencement of the compensation payment procedure, the Fund publishes in at least three national newspapers an invitation to the covered customers to make their claims against the Company arising from covered services, designating the procedure for the submission of the relevant applications, the deadline for their submission and their content.

Calculating the Amount of Payable Compensation
The amount of compensation payable to each covered customer is calculated in accordance with the legal and contractual terms governing the relation of the covered customer with the Company, subject to the rules of setoff applied for the calculation of the claims between the covered customer and the Company. The calculation of the payable compensation derives from the sum of total established claims of the covered customer 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.

Insofar as the amount of the claim determined, exceeds the amount in Cyprus Pounds corresponding to Euro 20.000, the claimant receives as compensation the lump sum in Cyprus Pounds of the amount of Euro 20.000.

For the determination of the equivalent of the Cyprus Pound against the EURO, the average exchange rate is taken into account as fixed by the Central Bank of Cyprus on the day of issue of the decision of the Cyprus Securities and Exchange Commission on the commencement of the compensation payment procedure by the Fund in accordance with paragraph 5(a) above, or the Court ruling in accordance with paragraph 5(b) above, respectively.

Upon completion of the valuation, the Fund (a) issues minutes listing the customers of the Company who are entitled to compensation, along with the amount of money each one of them is entitled to receive and communicates it to the Cyprus Securities and Exchange Commission and the Company within five working days from its issue and (b) communicates to each affected customer its finding no later than fifteen days from the issue of the minutes, determining the total compensation amount this customer is entitled to receive.

The claimant, to whom the Fund communicates the total compensation amount to which he is entitled, in case he disagrees with the Funds decision, has the right within ten days from the communication of the decision to appeal to the Cyprus Securities and Exchange Commission, justifying sufficiently his alleged claim.

The Fund is obliged to pay to each covered customer claimant the compensation within three months from sending to the Cyprus Securities and Exchange Commission the minutes with the compensation beneficiaries.

For any further information regarding the Fund, please refer to the offices of the Administrative Committee of the Fund, at the following address:

Administrative Committee of the Investor Compensation Fund for Customers of CIFs and other IFs:

32 Stasikratous Street, 4th floor
P.O. Box 24996
1306 Nicosia
E-mail address: investmentfirms@cysec.gov.cy
Fax no.: 22 375762