The Autoritié des marchés financiers reminds investors which investments are guaranteed against financial loss


Montréal – As part of the National Investor Education Month, the Autorité des marchés financiers (AMF) is reminding Québec investors that there is no protection fund or organization to compensate them in the case of financial losses due to market fluctuations.

This warning comes after the analysis of results of an investment fraud awareness quiz that was posted on the AMF web site from May 2003 to February 2004.

The results show that 27% of respondents mistakenly believe that their investments are protected against losses. Hailing from all regions of Québec, 84% of the 200 respondents to the quiz held investments. They were mainly francophone (90%) men (70%).

“As a general rule, the guarantees which exist apply either in the case of bankruptcy of a deposit institution or a brokerage firm which is a member of a protection fund, or in the case of fraud”, notes Anne-Marie Poitras, Executive Director, Consumer Assistance and Compensation of the AMF.

Victims of fraud committed by certain professionals may be compensated through the Financial Services Compensation Fund (FSCF) managed by the AMF. However, Ms. Poitras notes that “to be eligible for compensation, the victim of fraud must have used the services of an individual registered with the AMF”.

Note that the FSCF can intervene in the following eight sectors:

  • Insurance of persons
  • Group insurance of persons
  • Damage insurance
  • Claims adjustment
  • Financial planning
  • Group savings plan brokerage
  • Investment contract brokerage
  • Scholarship plan brokerage

Investors should therefore make inquiries before investing and should carefully choose their financial adviser. Most fraud is committed by individuals who are not registered with the AMF. You can determine whether the professional is registered with the AMF with a simple phone call. This type of check can help investors avoid problems if it is done before the investment in question is made.

One of the AMF’s mandates is to protect consumers through a one-stop service outlet for information, complaints, dispute resolution and compensation. The AMF also sets up educational programs and tools, in particular, to help people protect themselves against unfair, abusive or fraudulent practices.

Anyone wishing to measure their vulnerability to fraud may still do so by answering the quiz accessible to the public on the AMF web site, in the “Consumer” section.

Established on February 1, 2004, the Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec's financial sector. The AMF consists of the Commission des valeurs mobilières du Québec, the Bureau des services financiers, the Régie de l'assurance-dépôts du Québec, the Fonds d'indemnisation des services financiers and the Inspector General of Financial Institutions.

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