Arch cru investors face FSCS payout delay


Investors in failed investment vehicle Arch cru will be forced to wait longer to receive full compensation after the FSCS confirmed the wind-up of the funds has been delayed.

The lifeboat fund has paid £58m to Arch cru victims since 2012 and planned to make “top-up” payments to investors once the Arch cru funds had crystallised. The wind-up of the funds was due to take place in 2015 but the FSCS says this did not happen.

In a statement issued yesterday, the FSCS says: “CF Arch cru funds did not wind up in 2015 as expected. Therefore we could not make final top-up payments to affected customers.

“FSCS is considering how to continue with the part-compensated claims and will update affected customers in April 2016 regarding the approach to be taken. Customers do not need to take any action in the meantime.”

The FSCS could not be reached for further comment at the time of publication.

The FSCS payout is in addition to the £54m package set out by the regulator in 2011. Capita Group – whose subsidiary, Capital Financial Managers, acted as the authorised corporate director of the funds – contributed £32m to the scheme, with depositories HSBC and BNY Mellon paying the remainder.

The deal aimed to give investors an average of 70 per cent of the net asset value of the fund range when it was suspended, later revised down to 64 per cent. If accepted, investors could make no further claims against the three firms.

Separately, the regulator set up a consumer redress scheme requiring all advisers who advised on Arch cru to write to affected clients inviting them to opt into the scheme.

In January 2014, the FCA said 48 per cent of customers had opted into the scheme and advisers would pay out £31m in compensation.