FSA delays Arch cru verdict after huge response

The FSA has been forced to delay the results of its £110m Arch cru redress scheme consultation after an overwhelming response from advisers and investors, according to reports.

A paper was due to be published this month but the Mail on Sunday reports the FSA will hold off because of the large number of submissions.

The FSA began consulting in April and finished taking submissions in August. Plans for advisers to pay the costs of the scheme have come under fierce criticism with Tory MP David Davis blasting the scheme as “unfair” and lacking in “natural justice”.

In the minutes from its meeting on April 26 the FSA board said a “convincing case” still needs to be made for any plans to be implemented.

FSA estimates suggest the scheme could cost the Financial Services Compensation Scheme £30m and lead to 30 per cent of IFAs who sold Arch cru policies going out of business. Around 600 firms could be affected by the scheme.

The FSA is currently unavailable for comment.