The cost of the Investor Compensation Scheme is funded by which of the following?

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Multiple Choice

The cost of the Investor Compensation Scheme is funded by which of the following?

Explanation:
Funding comes from levies charged to firms covered by the scheme. This self-financing approach means the compensation scheme is funded by the firms it protects, based on factors like size or risk, so resources are available to pay eligible investors if a covered firm fails. The Government, the Central Bank, and the European Securities and Markets Authority do not fund it directly; they regulate or supervise, while the scheme’s funding remains the responsibility of the participating firms.

Funding comes from levies charged to firms covered by the scheme. This self-financing approach means the compensation scheme is funded by the firms it protects, based on factors like size or risk, so resources are available to pay eligible investors if a covered firm fails. The Government, the Central Bank, and the European Securities and Markets Authority do not fund it directly; they regulate or supervise, while the scheme’s funding remains the responsibility of the participating firms.

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