The Deposits Guarantee Funds in Luxembourg, the Fonds de garantie des dépôts Luxembourg (FGDL) is the deposit guarantee scheme officially recognised in Luxembourg. The investor compensation system is operated by the Système d’indemnisation des investisseurs Luxembourg (SIIL) (Investor Compensation Scheme Luxembourg).
The rules relatives to operating deposits guarantee and compensating investors are established by the Law of 18 December 2018 on the failure of credit institutions and certain investment firms. These rules are notably coming from the European Directive 2014/49/UE relative to the deposit guarantee schemes.
The Deposit Guarantee
The purpose of the Fonds de garantie des dépôts Luxembourg (FGDL), is to protect the clients of the member institutions in case of their bank’s failure.
It ensures the compensation of depositors within 20 working days (7 working days as from 1 June 2016), up to a maximum of 100,000 euros (unless otherwise provided, see below), subject to certain conditions and limits. This guarantee is understood to mean per person (natural persons as well as legal persons) and per institution.
The Investor Compensation
The Luxembourg investor compensation scheme (Système d’indemnisation des investisseurs, SIIL) covers investors, physical persons and legal entities within the limits and according to the terms and conditions provided for by the law of 18 December 2015.
The SIIL provides cover for claims resulting from an institution’s inability to: reimburse its investors the funds due to them or belonging to them, held on their behalf and related to investment transactions, in accordance with applicable legal and contractual conditions; Or to return to investors the instruments belonging to them and held by them, administered or managed on their behalf and related to investment transactions, in accordance with applicable legal and contractual conditions.
It covers, under the legal conditions in place, investments up to an amount equivalent to EUR 20 000, whatever their currency or location within the European Union and regardless of the number of accounts held.
For more information, please visit the FGDL Website.