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.”