The Polish investor compensation system versus EU-15 systems and model solutions

The purpose of a compensation system is the protection of small investors. The system should increase investors' confidence in financial market institutions and, therefore, support financial market stability. The main objective of Compensation System in the EU is adjusting EU member states to Directive ICD requirements. However, compensation systems are not the same in each country. Historical, cultural and social conditions within the EU might differently influence system solutions. The subject of this paper is an attempt to develop a model, based on theoretical and practical considerations, which will capture the development of financial markets and all risks involved. The model should necessarily undergo modifications and adjustments to the needs of developing EU-wide financial markets.