Professional paper

Investor compensation in Croatia: recent reforms and policy challenges

Petar-Pierre Matek orcid.org/0000-0003-0152-6920 ; Effectus veleučilište
Aljoša Šestanović orcid.org/0000-0002-8133-7494 ; Effectus veleučilište
Filip Radeljak ; Effectus veleučilište

Abstract

This paper explores the 2024 reform of Croatia’s investor compensation scheme, which introduced important enhancements aimed at strengthening investor protection and aligning the scheme more closely with international best practice. Key innovations include the adoption of risk-weighted contributions, the option to fulfil contribution obligations through financial instruments or payment security instruments, and new responsibilities for the supervisory authority to define a target fund level and ensure greater transparency. The paper reflects on how the existing structure - particularly the long-standing accumulation of non-redeemable contributions - may shape the practical impact of risk-based funding. It further considers methodological approaches for determining an appropriate target fund size in a market with limited historical claims data. By analysing Croatia’s evolving ICS model, the paper contributes to broader discussions on how investor compensation systems can balance simplicity, fairness, and risk sensitivity while maintaining market confidence.

Keywords

investor compensation schemes, investor protection

Hrčak ID:

343534

URI

https://hrcak.srce.hr/343534

Publication date:

21.12.2025.

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