Guarantee for deposits

Guarantee for deposits and financial instruments

For the admission as a credit institution in Luxembourg, it is required to participate in a deposit guarantee system and in an investor compensation scheme (cfr. art. 10-1 and 10-2 of the amended of April 5th 1993 concerning the financial sector).

As of today, both systems are managed in Luxembourg by the Association pour la Guarantie des Dépôts, Luxembourg (AGDL). Further information concerning the AGDL is available on the Internet web page www.agdl.lu .

Since January 1st, 2009 and the enforcement of the law of December 18th, 2008 on the State revenue and expenses for 2009, that provides in its article 44, paragraph 2, that the amount of 20.000 EUR in article 62-2 of the law of April 5th, 1993 is replaced by the amount of 100.000 EUR, the AGDL has adapted its statutes.

Hence the provisions of article 62-2, paragraph 2, stipulate: ”the guarantee systems for deposits have to cover all deposits of a depositor, regardless of their number, the currency or their localisation in the European Union, up to an amount equivalent to 100.000.- euros”.

Thus the amount covered by the guarantee for deposits has been increased to 100.000.- EUR, whereas the amount covered by the guarantee for financial instruments stays at 20.000.- EUR.

Summary of the guarantee features currently ensured by the AGDL:

Guarantee for deposits :
Cash deposits fall under the guarantee for deposits. In case of an insolvency of an AGDL-member, AGDL will protect all the eligible cash depositors offering them the reimbursement of their deposits up to 100.000.- EUR.

Guarantee for financial instruments (investor compensation scheme) :
Claims arising out of investment transactions fall under the investor compensation scheme. In case of insolvency, AGDL will protect all the eligible investors (which hold investment instruments or funds related to investment transactions at a credit institution) by ensuring the reimbursement of their claims arising out of investment transactions up to 20.000 EUR.

Pursuant to the law, the statutes of the AGDL provide several specific exceptions to the guarantee.

No claim shall be eligible for double compensation in virtue of these systems.

All currencies are protected without distinction.

The Guarantee covers natural persons as well as legal entities (within the limits of the statutes of the AGDL, in particular of the provisions of articles 6 and 7).

Concerning the deadlines for AGDL’s payout, its statutes provide that, except in case of an extension of the deadline in exceptional circumstances, all claims in respect of unavailable cash deposits or of investment instruments shall be paid within a period of three months from the date on which the unavailability of the deposits, respectively the eligibility and the amount of the claim arising out of investment transactions, has been established.

Furthermore, the provisions of article 11, paragraph 4, of the statutes of the AGDL “provide that the claims shall be declared to the Association either by the liquidators or legal representatives of the member concerned or by the depositor or investor himself.

Detailed documents setting out the conditions and formalities to be complied with in order to benefit from a guarantee payment shall be drawn up in one of the official languages of Luxembourg, …”