Compensation fund raises trading price

The first effect of the compensation fund for capital market investors, which is meant to provide extra safety to those investing in shares, will be to up the costs of brokerage firms on the market, something that will show in the trading fees charged to clients. Brokers will have to contribute periodically to the fund for every client on their books. The amount of the contribution is yet to be established but will be the same for every investor, regardless of the size of their investment portfolio. “Depending on the contribution we will have to pay we may have to drop certain clients or charge them so much that they will no longer find it profitable to trade,” explained Nicolae Ghergus, executive manger of Confident Invest securities firm. The compensation fund, introduced by new capital market legislation and due to become operational in the next few months, will allow for the reimbursing of investors in a similar manner to the bank deposits guarantee fund. ZF