Investor Presentaiton
3.3.4 The financial services compensation fund (Québec only)
Autorité des marchés financiers manages a financial services compensation fund called the
Fonds d'indemnisation des services financiers (FISF). This fund, the only one in North
America, compensates investors up to a limit of $200,000 in the event of fraud or
embezzlement committed by a registered intermediary doing business in the following
sectors: mutual funds, personal insurance, group insurance, loss insurance, claims
settlement, financial planning, scholarship brokerage, and investment contract brokerage.
The distributors fund the FISF in keeping with the risks this business incurs. It is the
Autorité that decides whether or not the investor receives compensation after filing an
application in the year of becoming aware of the fraud, accompanied by supporting
documentation.
Québec also provides other types of legal remedies for investors. There are general law
remedies available under the Québec Civil Code and specific remedies stipulated under the
Securities Act. Other statutory remedies may also be available and these give rise to class
action remedies on occasion.
3.3.5 The limits of Québec's compensation mechanisms
Despite the existence of several types of coverage in Québec, mutual fund holders may
sometimes find they have no protection after losing their assets. These situations are due to
the following provisions, among others:
➡ The FISF does not cover fraud that was committed outside of the covered disciplines.
The FISF does not cover fraud committed by a person who is not acting in the
capacity of a sales rep or retail firm, e.g. a mutual fund manager.
The FISF does not cover bankruptcy cases.
D
Fraud situations are not covered by the CIPF.
➡>>
The loss insurance offered by brokerage firms does not cover fraud committed by the
firms themselves.
Consultation paper
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