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Investment firms’ client assets to be covered by deposit guarantee

Publication date 22.3.2019 14.37 | Published in English on 23.9.2020 at 13.40
Press release

The coverage of the deposit guarantee will change due to a change in legislation, as client asset accounts held in the name of investment service providers will fall within the scope of the deposit guarantee. The change will not require any action on the part of depositors.

The change is due to an amendment of the Act on the Financial Stability Authority repealing the exemption on investment firms’ client asset accounts as of 20 March 2019. Deposits made by investment firms on their own account will still not be covered by the deposit guarantee. 

The coverage of protection is a matter of division of responsibilities between two separate funds, the Deposit Guarantee Fund and the Investors’ Compensation Fund. The Deposit Guarantee Fund was established to protect depositors, and the Investors' Compensation Fund to protect investors. Due to this change, in a potential compensation event due to the default of a deposit bank, deposits on client asset accounts held by an investment firm in the defaulting bank will  be compensated to the client from the Deposit Guarantee Fund.

More on deposit guarantee at Guaranteed deposits.