What kind of events trigger the coverage of the FOGAIN?
The coverage of the FOGAIN is triggered when an investment firm (Sociedad de Valores, Agencia de Valores o Sociedad Gestora de Carteras) or an UCITS Manager (Sociedad Gestora de Instituciones de Inversión Colectiva) - the latter case only in the event of the provision of discretionary portfolio management service to retail investors- becomes insolvent.
Insolvency means in this ambit that one of the following circumstances is present:
- That a Spanish judge had declared the opening of a "concurso judicial" (judicial insolvency proceedings) in respect of the firm.
- That the Spanish Securities Regulator (COMISIÓN NACIONAL DEL MERCADO DE VALORES or CNMV) issues an statement declaring that, due to the firm's financial situation, it is not able to meet its obligations before its clients.
When any of the circumstances above is present, the FOGAIN will compensate to those firm's clients that comply with certain legal requirements as set out below.