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

The AMF issued the warning after the results of an investment fraud awareness quiz, which was posted on the AMF web site from May 2003 to February 2004, showed that 27% of respondents mistakenly believe that their investments are protected against losses.

“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”, said Anne-Marie Poitras, executive director, consumer assistance and compensation of the AMF, in a news release.

Victims of fraud committed by certain professionals may be compensated through the Financial Services Compensation Fund managed by the AMF. However, Poitras noted that :to be eligible for compensation, the victim of fraud must have used the services of an individual registered with the AMF.” However, most fraud is committed by individuals who are not registered with the AMF.

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; and scholarship plan brokerage.

Investors should therefore make inquiries before investing and should carefully choose their financial adviser, the AMF says.