Kevin R Davis

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What is investor compensation scheme in Europe?

Investor compensation schemes provide protection if a regulated broker becomes insolvent. For example, in the UK, the FSCS covers up to £85,000 per client, while in Cyprus, the ICF covers up to €20,000. These schemes ensure traders recover at least part of their deposits in case of broker bankruptcy. However, they do not protect against trading losses. Compensation schemes increase trust in regulated brokers and are a major reason why traders choose Tier-1 licensed firms over offshore entities.