On May 19, 2026, the SFC warns investors about fraudsters impersonating officials to claim ICF compensation fees, clarifying that no fees are required and outlining the fund's actual coverage criteria.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On May 19, 2026, the Securities and Futures Commission ("SFC") urges the investing public to stay highly vigilant against sophisticated fraudulent schemes that exploit the name of the Investor Compensation Fund ("ICF") to target investors who have already suffered losses, often defrauding them a second time.
Fraudulent Practices and Modus Operandi
In recent cases reported to the SFC, fraudsters targeted individuals who had previously suffered investment losses – often from schemes orchestrated by the same syndicates – and falsely claimed that these victims were eligible to recover their losses through the ICF. These scenarios typically involved fraudsters who impersonated SFC executives or posed as legal professionals claiming that 'compensation' under the ICF may be arranged upon the payment of additional 'deposits' or 'handling fees'.
ICF Eligibility and Statutory Criteria
The SFC emphasises that the ICF is established under the Securities and Futures Ordinance, and compensation payment out of the ICF is governed by clear legal criteria: Investors will not be charged any fees for lodging claims against the ICF. The ICF only compensates monetary losses that stem from a default by a licensed intermediary or authorised financial institution in Hong Kong, and relate to: (i) securities traded on the Stock Exchange of Hong Kong or under the Northbound link of Stock Connect; and (ii) futures contracts traded on the Hong Kong Futures Exchange. The ICF does not cover losses resulting from share price fluctuations, poor investment performance, or scams perpetrated by unlicensed entities.
Verification and Administrative Process
The SFC reminds the public that the process for claiming compensation from the ICF does not require any upfront transfer of funds. In addition, the SFC does not contact investors via social media or instant messaging platforms to solicit payments for compensation claims. If members of the public are unsure about the legitimacy of any person claiming to be able to arrange compensation payments for investment losses, they should consult the Investor Compensation Company Limited or the SFC directly via official channels. Claims against the ICF are administered by the Investor Compensation Company Limited, a wholly-owned subsidiary of the SFC. Page last updated 19 May 2026.
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