FOGAIN

The FOGAIN (Fondo General de Garantía de Inversiones) is Spain's mechanism for protecting investors when their financial intermediary fails: it covers up to €100,000 per holder and entity when an investment firm cannot return the cash or securities it held in custody.

What it covers exactly (and what it does not)

It covers a single scenario: the insolvency of the intermediary — the firm failing and, through fraud or a balance-sheet hole, your securities or cash not being there. It does not cover, under any circumstance, market losses: if your stocks fall 40%, that is investment risk, not custody risk.

In practice, FOGAIN is the second line of defence. The first is asset segregation: your securities are registered in your name, separate from the broker's balance sheet, and in an orderly wind-down they are simply transferred — as the Ninety Nine closure showed, where no client lost their positions.

Which entities it applies to

Spanish investment firms (sociedades and agencias de valores) and Spanish managers for the portfolios they run. If your broker operates in Spain as a Spanish entity supervised by the CNMV, you are under the FOGAIN umbrella.

What if my broker is foreign?

Its home country's scheme applies, not FOGAIN:

The European €20,000 looks thin, but remember the order of protections: asset segregation covers your securities regardless of the amount; the guarantee scheme only kicks in if, on top of failure, assets are missing or there is fraud — a very rare scenario at regulated firms. The broker-by-broker comparison is in our brokers section.

Why it matters when choosing a broker

Not to rule out foreign brokers — the best costs are usually abroad — but to decide with open eyes: Spanish custody (MyInvestor, HeyTrade) offers maximum coverage and zero paperwork; foreign custody offers lower costs in exchange for lower nominal coverage and obligations like the Modelo 720.