£54M redress for Arch cru clients

23 June 2011 | By Chris Salih

The FSA has set out a £54m compensation package for investors in CF Arch cru funds.

The deal has been agreed between the regulator, Capita Financial Managers, BNY Mellon & Depository and HSBC Bank.

The deal, alongside the distributions already made and remaining assets, is designed to give investors an average of 70 per cent of the net asset value of the CF Arch cru fund range when it was suspended on March 13, 2009. Up to 20,000 people were invested in the range.

The FSA says if investors accept the payment it will be a final settlement of any claims against the three firms. However, invest-ors can still pursue their IFA.

It says the package will accelerate returns to investors, although details of the payment scheme are yet to be finalised. The regulator is discussing the scheme with the Financial Ombudsman Service regarding complaints made by investors to the FOS.

Capita will administer the payment scheme and will be contacting those invested in the Arch cru funds as at May 31, 2011 with further information before the end of August 2011.

Capita, the authorised corporate director of the £400m range, says its portion in the package will not exceed the £30m provision made in its 2009 accounts and that the package to investors is not an “admission of liability”.

The FSA has confirmed that Capita will not face a financial penalty over the Arch cru range.

Regulatory Legal partner Gareth Fatchett, who acts for more than 1,000 Arch-cru clients says: “The initial view of our clients is relief. That said, we need to understand the terms before being able to advise on the merits of settlement.”

In a letter dated June 16 seen by Money Marketing, Prime Minister David Cameron told a constituent he would increase the pressure on the FSA if it does not present more information to investors by the end of June.

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