Minister rejects investor review

CALLS to have the levels of compensation payable under the Investor Compensation Act increased from 20,000 to 1 million have been rejected by Finance Minister Charlie McCreevy.

Fine Gael TD Jim O'Keeffe has been campaigning for a major review of the Investor Compensation Act following the collapse of Cork stockbroking firm W&R Morrogh with liabilities in excess of 6m. Compensation payable from the Investor Compensation Fund, financed by the stockbroking and financial services community, is fixed under the Investor Compensation Act at the lesser of 90% of the loss incurred or 20,000.

"I see no reason why there should be any limits on the level of compensation payable in the stockbroking world. Investors need to be protected ," he said.

However, in reply to a Dáil question from Mr O'Keeffe, Mr McCreevy said the 20,000 limit is in line with the obligations imposed under the relevant EU directive. Mr McCreevy said that many of the contributing firms to the fund are small-scale and a balance must be struck between the interests of investors and well-managed firms. Mr McCreevy said that the assessment of the regulatory implications of the collapse of W&R Morrogh is being taken forward as expeditiously as possible by officials at his Department, in conjunction with representatives of the Irish Financial Services Regulatory Authority and the Investor Compensation Company Limited.