Guarantee for deposits

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 Fonds de garantie des dépôts Luxembourg (FGDL). Further information concerning the FGDL is available on the Internet web page .

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 EUR 100,000, the FGDL 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 EUR 100,000, whereas the amount covered by the guarantee for financial instruments stays at EUR 20,000.

Summary of the guarantee features currently ensured by the FGDL:

  • Guarantee for deposits :
    Cash deposits fall under the guarantee for deposits. In case of an insolvency of an FGDL-member, FGDL will protect all the eligible cash depositors offering them the reimbursement of their deposits up to EUR 100,000.
  • Guarantee for financial instruments (investor compensation scheme) :
    Claims arising out of investment transactions fall under the investor compensation scheme. In case of insolvency, FGDL 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 EUR 20,000.
  • Pursuant to the law, the statutes of the FGDL 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 FGDL, in particular of the provisions of articles 6 and 7).

Concerning the deadlines for FGDL’s payout, its statutes provide that, except in case of an extension of the deadline in exceptional circumstances, all duly verified claims of the depositors in respect of unavailable cash deposits shall be paid within a period of 20 working days from the date on which that unavailability is established and all claims in respect of investment instruments shall be paid as soon as possible and no later than three months after the eligibility and the amount of the claim have been established.

Furthermore, the provisions of article 11, paragraph 4, of the statutes of the FGDL “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, …