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PR(03)07: Norway fails to implement correctly the Investor-compensation schemes directive


On 11 April 2003, the EFTA Surveillance Authority delivered a Reasoned Opinion to Norway for failure to comply with EEA rules in the field of financial services.

The Investor-compensation schemes directive (97/9/EC) lays down harmonised rules in order to ensure that all investment firms have or belong to an investment-compensation scheme that guarantees a minimum level of protection for the investors in the event of the firm being unable to meet its obligations towards its investor clients.

Article 4 paragraph 1 of the Investor-compensation schemes directive requires Member States to ensure that investor-compensation schemes under certain circumstances provide for a cover of not less than 20.000 € for each investor when it appears that the firm is unable to meet its financial obligations.

By contrast, Section 5 of the Regulation of 14 October 1996 no 983 on investment firms’ investor protection schemes, which is the Norwegian legislation that implements Article 4 of the mentioned directive, provides that the minimum level of compensation shall be NOK 200.000 [approx. 25.000 €] per investor per loss event. However, in addition, it is stated that the total amount of compensation available may nonetheless be limited to NOK 25 million [approx. 3 million €]. This limitation may lead to severe consequences in a case where an investment firm has a large number of investors, some of them thus being rejected compensation. The Directive contains no limitation corresponding to the one found in Norwegian law.

In light of these circumstances, the Authority has concluded that Norway has failed to implement correctly Article 4 paragraph 1 of the Investor-compensation schemes directive, hereby disregarding its obligations arising from Article 15 of that directive and from Article 7 of the EEA Agreement.

The purpose of a reasoned opinion is to give the State in question a last chance to take corrective measures before the Authority decides whether to bring the matter before the EFTA Court. In this case the Authority requests that the Norwegian Government takes the necessary measures to comply with the reasoned opinion within two months.

For further information, please contact Mr. Niels Fenger, Director of Legal and Executive Affairs, on telephone +32 (2) 286 1830.

14 April 2003

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