NAGA has added private insurance for clients of its CySEC-regulated European business. The policy is designed to cover missing cash and securities if the broker becomes insolvent and client assets have been lost through fraud, theft or similar misconduct.
The cover is an addition to Cyprus’s €20,000 Investor Compensation Fund and is advertised as providing up to €1 million per eligible client.
However, that individual ceiling tells only part of the story. The policy also has an overall limit across all claims, which NAGA has not disclosed.
If eligible losses exceed that amount, payments may be reduced proportionally, leaving each client with less than the advertised maximum.
What the Policy Actually Covers
The Lloyd’s policy issued to CySEC-regulated Naga Markets Europe Ltd, is valid until September 30, 2027.
The policy covers eligible cash and securities held with NAGA, including shares and ETFs. Cash used as margin remains covered, but the CFD positions themselves are not.
The insurance therefore does not reimburse clients for unsuccessful trades, market movements or declines in the value of open positions.
The insurance automatically covers individuals and small businesses using Naga Markets Europe, with no minimum account balance. It does not follow the NAGA brand across jurisdictions: customers served by other group entities, including NAGA Capital in Seychelles, are outside the policy.
If a claim arises, it will be handled as part of the broker’s insolvency rather than directly between the customer and Lloyd’s. Any claim would be handled through the broker’s insolvency process rather than directly between the customer and Lloyd’s.
€1 Million Broker Insurance Is Not Unique
Private insurance above statutory compensation limits is already used by several brokers. Capital.com and Skilling advertise comparable protection of up to €1 million for eligible European clients.
The programmes are voluntary, and their terms differ. In particular, the maximum per client does not show how much an insurer would pay across all customers after a major failure.
Some brokers publish both figures. Vantage, for example, states that its policy provides up to $1 million per eligible claimant within an aggregate limit of $50 million.
NAGA discloses the individual ceiling and warns that claims may be reduced if the overall limit is exceeded, but does not state how large that shared pool is.
This article was written by Tanya Chepkova at www.financemagnates.com.
Source: Finance Magnates
