ICF

The Investor Compensation Fund (ICF) is a compensation scheme that reimburses a broker's clients if the firm becomes insolvent or fails to return client funds. It acts as a second layer of protection alongside segregated-account rules.

How the ICF Protects Traders

An ICF pays out claims when a participating broker cannot meet its financial obligations to clients. It is funded by contributions from the participating brokerage firms themselves, not by a government, and a financial regulator oversees the fund to keep it within legal standards.

• Eligibility: coverage typically applies to retail clients rather than institutional investors, and only to certain types of claims.
• Compensation limits: payouts are capped at a fixed amount per client, and the cap varies by jurisdiction.
• Funding: the fund is built from mandatory contributions paid by member brokers.
• Oversight: a financial regulator supervises the fund's operations.

Limitations to Be Aware Of

ICF coverage has boundaries that traders should check before relying on it:

• The compensation cap may not cover the full account balance of active or high-volume traders.
• Some account types or trading products can be excluded from coverage.
• Not every broker participates in an ICF scheme, so clients of non-participating brokers have no such protection.

ICF vs. Other Investor Protection Schemes

The ICF model is specific to Forex and investment firms and differs from deposit- or securities-protection schemes in other markets:

Checking Whether a Broker Is Covered

Before opening an account, confirm whether the broker is a member of an ICF and what compensation limit applies. A broker's regulatory disclosures or license page will state ICF membership; if none is listed, assume no such protection exists.