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FSCS confirms Maltese investors can claim against Catalyst

The Financial Services Compensation Scheme has confirmed that investors who dealt with Maltese IFAs will be eligible to make claims against Catalyst Investment Group.

In an update published today, the FSCS said it will begin inviting claims against Catalyst by the end of this month and that investors who received advice from advisers based in Malta will be able to claim against Catalyst in the same way as investors who dealt with advisers in the UK.

In October the FCA censured Catalyst for misleading investors when promoting bonds issued by Luxembourg-based life settlement vehicle ARM Asset Backed Securities.

The FSCS had expected claims against Catalyst to trigger an interim levy of £30m on investment intermediaries for 2013/14. But the FSCS announced last month the interim levy would no longer be raised in this financial year, due to a delay in the processing of claims against Catalyst. The sum is likely to be raised in 2014/15 instead.

In December the FSCS said it was investigating how the ARM bonds were sold outside the UK, noting it was aware that a large number of investors invested in the bonds through firms based in Malta.

In its update today, the FSCS says: “We are close to finalising the process under which claims against Catalyst will be investigated. Once the process has been finalised we will write to all known investors who bought ARM bonds inviting them to make a claim against Catalyst.

“This will include investors who received advice from IFAs based in Malta. Following an investigation into how the ARM bonds were distributed and sold in Malta, FSCS is satisfied that investors who dealt with Maltese IFAs will be able to claim against Catalyst in the same way as investors who dealt with UK IFAs.”

The FSCS refused to say how much could be due in compensation to investors who dealt with Maltese advisers, and whether or not this had already been taken into account in its claims forecasts.

It also refused to say whether compensation would be available to investors in other countries.


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Derek Bradley ceo Panacea Adviser 7th March 2014 at 3:23 pm

    Is there anywhere in the world that the FSCS does not cover?

  2. So someone set up a UK firm approved by the FCA to distribute toxic, high commission paying, back end loaded funds to advisers around the world who more often than not will be poorly qualified with maximum commission as their main motivator.
    UK firm inevitably goes bust – client can’t claim against the overseas adviser due to poor or non existent local regulation. Overseas adviser retains commission.
    UK advisers who would never go near such a toxic fund and were not party to the UK authorisation of the firm that went bust, must now pay compensation to the overseas adviser’s client.
    Is this really what the FSCS is for?

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