LIECHTENSTEIN Law and Practice Contributed by: Bernhard Rankl, Moritz Blasy and Nicolai Binkert, Schurti Partners Attorneys at Law Ltd
Administration and Structure Both schemes are administered by the Einla- gensicherungs- und Anlegerentschädigungs- Stiftung SV , which operates as a Protected Cell Company (PCC), a unique legal structure that allows assets and liabilities to be segregated into separate “cells” within a single legal entity. This means that the foundation can handle dif - ferent types of insolvency events or compen - sation claims separately, ensuring that funds earmarked for one purpose cannot be used for another. Each participating financial institution is required to contribute to the fund, ensuring that the necessary financial resources are available in the event of insolvency. In the event of a bank failure or insolvency, the EAS activates its compensation mechanism. There is no need for depositors to file claims as the compensation process is usually automatic. The EAS aims to compensate depositors within seven working days, ensuring quick access to protected funds. This fast payout time is in line with EU standards and reflects the importance of maintaining financial stability and public con - fidence in the banking system. Funding Mechanism The DGS and the ICS are financed by contribu - tions from banks and investment firms operating in Liechtenstein. These institutions are required to pay an annual contribution based on the size of their deposit base, which is calculated in pro - portion to the total amount of deposits they hold. In addition, the Foundation may collect extraor - dinary contributions if necessary, should the funds fall below a threshold necessary to cover a major insolvency event. The funding mechanism is designed to be robust and sufficient to meet potential claims, with an emphasis on ensuring that funds are readily available to compensate depositors in a timely manner.
posing Directive 2014/49/EU (Deposit Guaran - tee Scheme Directive) and Directive 97/9/EC (Investor-Compensation Scheme Directive) into national law. Protection Scheme The protection scheme has two legs, namely the deposit guarantee scheme and the investor compensation scheme. Deposit guarantee scheme (DGS) The DGS covers deposits up to CHF100,000 per depositor and bank. For joint accounts, the deposit guarantee limit is CHF100,000 per depositor. This means that each holder of a joint account is entitled to protection up to the maximum limit independently. It covers almost all deposits of natural or legal persons, with a few exceptions such as deposits of other finan - cial institutions, deposits of public authorities and government bodies and deposits of certain investment vehicles such as funds (UCITS and AIF). In certain cases, temporary high balances in excess of CHF100,000 are also covered for a certain period of time. For example, deposits resulting from the sale of private property, insur - ance payments or pension capital can be pro - tected up to CHF750,000 for a maximum of six months from the occurrence of the compensa - tion event. Investor compensation scheme (ICS) The ICS protects clients of investment firms in case of financial failure. This protection is limited to CHF30,000 per investor. The scheme covers securities and other financial instruments held by banks or investment firms that are lost due to insolvency or mismanagement.
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