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Exeter pays £1m into FSA split-cap settlement fund

Exeter Asset Management directors have negotiated a £1m agreement with the FSA over its role in the split- caps crisis.

The agreement, signed last week, requires Exeter to pay the money into Fund Distribution, the company established to administer payments to investors in zero-dividend shares of split-capital investment trusts. The payment has been made without any admission of wrongdoing and the FSA will end its investigation into Exeter.

Exeter’s parent company Iimia said last December that Exeter would be unable to join the settlement, then being negotiated between 18 firms and the FSA. The 18 companies have approved the new settlement. Exeter has effectively signed up late to the original agreement.

The agreement follows Exeter Asset Management’s sister company Exeter Fund Management going into administration. The firm had a considerable amount of money invested in open-ended zero dividends, which fell outside the remit of the settlement.

Exeter Asset Management has only closed-ended zero dividends and no open-ended zero dividends.

Teather & Greenwood, bought by Icelandic bank Landsbanki for £43m in February, is paying £300,000 to the settlement fund without admission of wrongdoing. Teather & Greenwood acted as a broker and did not manage any splits.

Iimia chairman William Long says: “Removing Exeter Fund Management from the equation means we can now get in on the settlement. Holders of the funds listed in the settlement will now be able to make claims for compensation. Everything has been sorted out without the admission of resp-onsibility. This is just like the other 18 firms. This represents a turning point for the group.”

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