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Europe rebuffs calls for rise in compensation level

The European parliament has refused to back a recommendation to increase the Investor Compensation Scheme’s maximum guaranteed level of compensation to €100,000.

In April, the economic and monetary affairs committee published draft amendments calling for the maximum guarantee to be doubled from the European Commission’s proposal of €50,000.

In a plenary session in Strasbourg this week, the move was the only committee proposal rejected by the parliament.

In the UK the Financial Services Compensation Scheme has a £50,000 limit on investments, which would have to be significantly increased if the €100,000 Euro limit was introduced.

The European Council must now come forward with its position before it, the parliament and the commission decide a final text. The parliament accepted the recommendation for the scheme to be pre-funded. It said national schemes should be fully funded within five years, half the time proposed by the commission. It said “bad advice” should be included as grounds for a claim, which the commission did not recommend.

Conservative MEP for London Syed Kamall says: “We started off looking at just fraud and maladministration. Covering misselling in the ICS has come from MEPs in other countries looking at the UK model. I do think we need to tackle misselling but I do not think this directive is the right place to do it.”

The parliament’s rapporteur for the directive, Swedish Liberal MEP Olle Schmidt says:“I believe in the right to choose but there must also be the right to protection.”

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  1. Lawyers Ombudsman £30,000,
    Europe rejects Increase to 100,000 Euros.
    FSA/FOS increases to £150k for small businesses they wish to put out of business.
    Why are the inmates running the asylum and being allowed to get away with it?

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