The Financial Services Authority (FSA) has agreed to clarify the level of compensation investors in Arch cru funds can expect to receive after MPs attacked the regulator over confusing letters sent to investors.
In a meeting with MPs in parliament today, the regulator also said it would consider getting all interested parties together to look at the deal and address concerns.
Under a compensation deal set out by the FSA, Capital Financial Managers, BNY Mellon Trust and Depository Ltd and HSBC, investors were told to expect to get around 70% of the value of their investments when the fund collapsed in March 2009, when set alongside distributions already made and remaining assets. Investors taking compensation under the scheme must accept it as full and final settlement against the three firms involved but can make further claims against their IFA.
Today 40 MPs and representatives of another 20 MPs met Margaret Cole, the FSA conduct of business unit interim managing director, and Georgina Philippou, the head of enforcement and financial crime. According to a source in the meeting, MPs told them letters received by constituents were unclear about how much compensation they would receive. Cole agreed to look at the issue and inform MPs of any findings. The regulator insisted it had got the best deal for those who have lost money. (article continues below)
The FSA also agreed to consider calling a meeting with all relevant parties to discuss the compensation deal. The source says the FSA told MPs some 900 IFAs were involved in recommending Arch cru products and could now face further claims, an IFA representative would be invited.
Tom Greatrex, the co-chair of the all party parliamentary group on Arch cru, says: “A number of important issues were raised and some answers were given but there are still issues that remain unresolved. The FSA has agreed to go away and look at some of them, in particular the lack of clarity around the compensation for investors and to look at getting the main involved parties together to try to further highlight the many ongoing concerns of investors.”
Last week, Capita Financial Managers admitted there is “significant difficulty and uncertainty” is assesing the value of around 75% of the £149m of assets held in Arch cru funds. The figures cast doubt over the feasibility of the compensation package