The Financial Services Compensation Scheme says it has yet to decide whether savers who invested in Lifemark through Keydata will qualify for compensation.
The Financial Mail on Sunday last week reported that the FSCS is likely to rule out compensation for the 23,000 investors who invested £349m in Lifemark’s traded life settlement bonds through Keydata because it is impossible to quantify their losses.
But the FSCS says a decision has not been taken on the compensation claims and the speculation is “premature”.
An FSCS spokesman says: “It is premature to say we will not compensate consumers as the process has not been finished. There is a chance we could compensate and equally there is a chance that we will not.”
He adds the FSCS is still planning an announcement in September over compensation. “We will do all we can to provide certainty on the position of the FSCS as soon as we can.”
The Mail on Sunday report suggests the FSCS would also rule that Luxemburg-based Lifemark was responsible for investors’ losses rather than Keydata itself and the FSCS only compensates where a UK company is at fault.
If the FSCS were to announce compensation for Lifemark investors, advisers could be hit with another controversial levy. Regulatory Legal has secured a court date for a judicial review of the last FSCS levy imposed to compensate investors for the collapse of other Keydata products, to be heard on November 4 and 5.