Client Protection

Background

Investors Europe was originally set up in 2001 in Gibraltar as a regulated, EU MiFID-compliant stockbroker with passporting rights to the European Union. In January 2013, Investors Europe (Mauritius) Limited extended the group’s activities to Asia, Africa and Oceania as a regulated stock broker based in the Republic of Mauritius. Multi-ethnic Mauritius is a Parliamentary democracy that is one of the most successful developing countries (using IMF and World Bank criteria on record). The Indian Ocean island grew on average 5 percent per annum for the 40 years preceding 2015. It is currently (2016) growing around 3.5 percent per annum.

The Protection.

  1. Investors Europe is Authorised and Regulated by the Financial Services Commission of Mauritius.
  2. Mauritius provides a well regulated environment as shown by its international recognition and signatory/ membership of IOSCO, IAIS, OECD, FATF and IFSB.
  3. Client monies are received directly into the company’s segregated client bank accounts within the EU, from where they are transferred to end brokers facing the Markets.
  4. Client monies therefore do not need to be transferred to or held in Mauritius.
  5. All the company’s client trading accounts are segregated and margined individually.
  6. All the company’s client trading accounts are designated “Client”. e.g. “Client GHJ 123654”.
  7. The Company does not hold client assets in the euro area, because of the Cyprus Syndrome.
  8. When client monies and assets are held (e.g. in the UK) the company’s underlying clients are recognised by the UK’s Investors Protection Scheme because these underlying trading accounts designated as ‘client accounts’ and recognised as individual client accounts, in the event of the failure of one of the Company’s end brokers/ banks/ custodians in the UK.
  9. Because the company is purely and solely execution-only, the situation is crystal clear for end regulators to protect clients in the event of the failure of the company’s end brokers/ banks/ custodians.
  10. Because the company is 100% execution-only, its capital is never at risk in the financial markets. The possibility of bankruptcy is thus totally minimised.
  11. In the unlikely event that the company goes bankrupt, however, the segregated and individually margined client accounts would remain segregated in-situ and the appointed liquidator would legally have no other option but to return client funds and client securities from individual trading accounts to individually designated clients. It would be illegal for the liquidator not to do so.
  12. Since 2001/2 the company has contracted a professional indemnity insurance with AIG Belgium (EUR 1.2 Million) as additional protection for its clients.
  13. Since 2013, the company has added another layer of client protection by contracting a global fraud insurance (EUR 1 Million), with AIG. This is totally voluntary and unique as no other stock brokers with lowest risk execution-only regulatory status have these insurances, which are on top of existing regulation, annual audits, investor protection schemes etc etc.
  14. No member of staff, director or indeed any beneficial owner is allowed to trade for themselves or have trading accounts with the company.
  15. There can thus never be the possibility of a conflict of interest which is the great Achilles heel of banks and other financial institutions (including Asset Managers) who may have their own book but also asset manage their clients’ investments at the same time, leaving them open to temptation on an ongoing basis.
  16. The best and lowest risk combination for clients is when both the company and the end broker facing the Markets on behalf of the company are execution-only. This cuts down significantly the potential risk for clients. Banks have conflicts of interest they need to manage and sometimes they lose control. This cannot happen here.
  17. The Company complies with Applicable Law, wherever relevant. The Company is FATCA compliant in respect of US clients.
  18. The Company has no presence in the US.
  19. The Company is incorporated as a Category I Global Business Company* and pays annual corporate corporate tax in Mauritius.
  20. The Company’s owner and founder is British but was born in Mauritius. He is a well known figure within the diamond mining space and financial markets.

 

For the foregoing reasons, the Board of Directors is firmly of the opinion that the commitment of Investors Europe Mauritius to the protection of clients is unique amongst regulated stock brokers.