This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.
X
MM+cover+small+180914

FSCS rejects compensation claims for Arc, NDF and DRL investors

  • Print
  • Comments (3)

Investors in capital at risk products from NDF Administration, Defined Returns Limited (DRL) and Arc Capital and Income will not be able claim compensation from the Financial Services Compensation Scheme.

The FSCS says that following a review, the firm was satisfied that the relevant marketing materials provided had adequate and appropriate warnings that there was a risk to investors’ capital if the organisation backing these investments failed.

Products at risk included the NDF fixed income and growth February 2008, NDF fixed income plan June 2008, DRL kick out performance plan issue 1, Arc fixed income plan 6 and Arc stepped kick out plan 5.

The FSCS says that investors will not have claims arising from the materials and that it will not send application forms to all known investors with Capital at Risk products.

The statement says: “However, if any investor wishes to submit a claim to us, for any specific other reason, they can do so by contacting us to request an application form. When completing the application form, investors should provide us with as much information as possible about why they believe their claim is eligible for compensation. We will then assess claims for compensation on a case-by-case basis.

“By completing the application form, the investor will be able to set out why they believe they have a valid claim against NDF, DRL or Arc. Please be aware, however, that we can only accept a claim where a claimant can demonstrate to us that a legal liability is owed to him or her by one of the firms in default.”

The decision comes more than 10 months after the groups failed due to exposure to the collapse of Lehman Brothers.

The FSCS announced a £22m levy on intermediaries in March to cover losses from certain other products from NDFA, DRL and Arc. This was in addition to the £58m levy charged to cover client losses from the Keydata collapse.

The FSCS says: “There have been a number of complex issues to resolve which required detailed review and external advice.  Whilst we understand that investors will be disappointed by this news, we are grateful for the patience shown whilst we investigated the position.”

  • Print
  • Comments (3)

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

The Money Marketing CPD Centre
Build your annual CPD - you can log and plan your CPD hours for free with The Money Marketing CPD Centre.

Taxbriefs Advantage
Advantage is a digital reference source giving unbiased, independent, answers to your technical queries. Subscribe to Taxbriefs Advantage.

Readers' comments (3)

  • "External advice"?

    I'm sure that many advisers who avoided these "esoteric and opaque" (Martin's words) products will breathe a sigh of relief, I know some firms who will be in a pickle though and if they fell over there would be a flood, nay a tsunami heading the way of the FSCS.

    This compensation machine will become your prison, and theirs.

    Unsuitable or offensive? Report this comment

  • Which only goes to prove that if the FSA was prepared to approve product literature we wouldn't now be paying up for Lifemark and Keydata.

    Unsuitable or offensive? Report this comment

  • FSA sends both companies into administration primarily due to problems with literature for Lehman related products. FSCS finds literature had adequate risk warnings. Er, am I missing sumfink?.

    Unsuitable or offensive? Report this comment

Have your sayEdit my profile/screen name

You must sign in to make a comment

Fund Data

Editor's Pick



Poll

Is Labour right to be concerned about the unintended consequences of the Budget pension reforms?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments