As a mutual fund saver, you own fund units in a mutual fund that is managed by the fund management company. The assets in the fund, and thereby your fund savings, are separated from the property of the fund management company and are kept in the custody of a bank or another credit institution (custodian). The custodian shall hold the securities included in the fund separate from its own assets. In the event of a bankruptcy at the custodian or the fund management company, the fund’s securities and your fund units will thereby be protected from the bankruptcy.
The investor protection applies in exceptional circumstances when you have your fund units held in trust at an institution, e.g., your bank. Consequently, the bank has purchased the fund units for you, but in its own name. Fund units that are held in trust shall be separated from the bank’s own assets. As a result, you would still be able to access your fund units from the bank if the bank declared bankruptcy.
In the event the bank in which your fund units are held in trust declares bankruptcy and it proves that due to gross negligence or criminal activity it is not possible to identify your fund units, the investor protection will be applied. In this case, you can receive a remuneration of a minimum of EUR 20,000. Customers requesting remuneration from the investor protection shall make a claim to the authority responsible for investor protection no later than one year from the date of the bankruptcy decision. After evaluation of the claim, the authority responsible for investor protection shall make the applicable remuneration payment.
The investor protection is, therefore, a protection against the administrative risks of a bankruptcy. It does not provide protection against any changes in the value of your fund units or other securities. Nor does it indemnify for losses in the event the issuer of the securities declares bankruptcy.