Orders and trading · updated October 21, 2026
What is an investor compensation scheme and what does it cover if your broker fails
An investor compensation scheme pays you back for missing cash and shares, up to a limit, if your broker goes bankrupt and cannot return them. It does not protect you from falling prices: if your shares drop, the loss is yours.
How it works
In the EU, every country has a compensation scheme with a minimum limit of 20,000 euro per investor, per broker; in Romania it is the Fondul de Compensare a Investitorilor (FCI). Some countries set higher limits. In the UK, the FSCS covers up to 85,000 GBP. In the US, SIPC covers up to $500,000 per client, of which at most $250,000 in cash. On top of that, your shares are held separately from the broker's own money, so in most failures they are simply moved to another broker without the scheme being needed.
Worked example
You hold €60,000 of shares at an EU broker. The broker fails and, because of fraud, €30,000 of shares are missing.
If the scheme in the broker's country has a higher limit, the uncovered loss is smaller. Check the limit before you open an account.
Worth knowing
The best protection is a licensed broker that keeps client assets separate. The scheme only steps in when cash or shares are actually missing.
When the investor compensation scheme can fool you
It does not cover market losses: if a stock falls 50%, the scheme pays nothing. CFDs and crypto are usually not covered. The limit is per broker, not per account: two accounts at the same broker share one limit.
Related terms
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Questions about the investor compensation scheme
What happens to my shares if my broker goes bankrupt?
The shares are in your name and held separately. They are usually transferred to another broker. The compensation scheme only steps in if shares or cash are missing.
How much does an investor compensation scheme cover?
At least 20,000 euro per investor, per broker, in the EU; up to 85,000 GBP under the UK FSCS; up to $500,000 (of which $250,000 in cash) under the US SIPC. Check the current limit on the scheme's website.
Is money at a broker protected like a bank deposit?
Not in the same way. Bank deposits are covered by deposit guarantee schemes (100,000 euro in the EU), while cash and shares at a broker fall under investor compensation, usually with lower limits.
These explanations are for information only. They are not a recommendation to buy or sell.
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