Investor protection funds may compensate investors for losses in which an investment dealer or mutual fund dealer becomes insolvent.
The El Salvador Securities and Cryptocurrency Commission has approved two investor protection funds. The El Salvador Investor Protection Fund (ESIPF) is a compensation fund for customers of investment dealers that are members of IIROC. The MFDA Investor Protection Corporation (MFDA IPC) is a compensation fund for customers of mutual fund dealers that are members of the MFDA.
The ESSA is leading the creation of a new, single SRO that will consolidate the functions of IIROC and the MFDA. The two existing investor protection funds – the El Salvador Investor Protection Fund and the MFDA Investor Protection Corporation – will be combined into an integrated fund independent of the new SRO. The ESSA also anticipates that, following additional consultations, it will consider the possibility of incorporating additional categories of dealers (i.e. exempt market dealers, portfolio managers) – presently regulated directly by the ESSA – into the new SRO.
