The regulator says investors with the firms may be entitled to compensation under the Financial Services Compensation Scheme.
Money Marketing yesterday revealed that NDFA was on the brink of administration and Grant Thornton has now confirmed that it has been appointed administrator to both NDFA and Defined Returns Limited.
Together both companies have 35,000 customers and around 10 per cent of these have invested in Lehman Brothers backed structured products.
Last September NDFA and DRL warned investors in their structured products underwritten by Lehman Brothers that they should prepare themselves for substantial financial losses.
NDFA was established in 1985 and deals in structured products and Isa mortgages under its own brand and DRL was set up by the firm to administer plans that were directly run by Lehman Brothers.
NDFA has around £30m of investors money in Lehman-backed plans.
Grant Thornton partners Andrew Hosking and Martin Ellis have been appointed joint administrators at the request of the firm’s directors.
The firm says it is committed to working with the FSA, the Financial Services Compensation Scheme and other bodies to help protect investors’ and creditors interests as well as the assets of NDFA and DRL.
Hosking says the first priority is to confirm that investor funds have been segregated from those of NDFA and DRL.
He says: “Based on the limited current information we have seen to date we understand this to be the case, however we need to verify this. In the short term, whilst we undertake this review, investor cheques will not be banked.
“Furthermore investors will not be able to redeem their investments or receive income under their respective product plans until we have completed this review, which we hope will not take much time.”
Grant Thornton says it will be offering the business and assets for sale but has currently suspended its operations and is currently keeping it fully staffed.
The administrators confirmed earlier Money Marketing reports that it has secured assurances from OPAL that they will continue to administer the business and says this will run into the New Year.
They will be writing an initial letter to all investors within one week and have set up a website at http://www.ndfa.creditorhelpline.co.uk and a helpline for investors at 0844 770 2203 with information and guidance.
They have asked investors not to submit claims at this stage.
If you have experienced problems with structured products please contact firstname.lastname@example.org.