Regulatory Alerts2019-12-11
EAC Council Directive on Investor Compensation Funds
The East African Community Council of Ministers has issued a directive harmonizing investor compensation funds across Partner States to protect retail investors and reduce systemic risk in securities markets. The framework mandates independent fund administration, establishes a maximum compensation limit of US$1,000 per aggregate claim, and requires eligible investors to lodge claims within three months while ensuring payouts occur within six months of appointment. It further defines funding sources, excludes professional and institutional investors, and grants funds subrogation rights to recover payments from failed market intermediaries.
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