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The Investor Protection Fund (IPF) was set up in 1997 as a new organisation of investor protection in Hungary.
All business organisations which are licensed to engage in covered lines of business by the Hungarian Central Bank are obliged to join the IPF, at present all investment companies, credit institutions that provide investment services and investment fund management companies that manage private portfolios seated in Hungary are members of the IPF.
The Investor Protection Fund provides limited property coverage funded from the contributions paid by its members and from other revenues if the Central Bank of Hungary initiates liquidation proceedings against a Fund memeber or a court orders the liquidation of a Fund member and the member cannot effect delivery against certain investor claims due to lack of funds, i.e. is not capable of performing its commitment to disburse deposits.
If the conditions precedent to disbursing compensation are satisfied, the IPF compensates investors entitled to compensation for claims up to a maximum amount of one hundred thousand euro per person and per Fund member on the aggregate.
The IPF paid 110 billion HUF as compensation in eighteen compensation proceedings from its establishment until 2020.
The Investor Protection Fund is governed by a nine-member executive board and the IPF’s operations are directed by the managing director.
The Settlement Fund is also governed by the executive board of the IPF and the Fund is operated by the work organisation of the IPF.