What a compensation scheme is
Some regulators back client money with a compensation fund that may pay eligible clients if a firm fails and cannot return their assets.
Coverage, eligibility, and payout caps vary significantly by scheme and jurisdiction.
Key limits to check
Compensation usually applies to defined client assets and up to a maximum amount per person. It may not cover trading losses or all account types.
Confirm the scheme name, the cap, and what is excluded before relying on it.
- Per-person cap
- Eligible asset types
- Exclusions
- Claim process
It complements, not replaces, diligence
A compensation scheme is a backstop, not a reason to skip checking the broker. Combine it with regulation and segregation.
Our broker records mark regulation as empty until verified, so confirm scheme membership yourself.
A large advertised cap means little if the broker is not actually a member. Verify membership with the scheme administrator.
Frequently asked questions
Does compensation cover my trading losses?
Generally no. Schemes typically cover the failure of the firm to return client assets, not losses from market movement.
Are all brokers in a scheme automatically?
No. Membership depends on the licence and jurisdiction. Always confirm the specific broker's participation.