Norwich & Peterborough Building Society is to repay the Financial Services Compensation Scheme for payments the scheme has already made to N&P customers who invested in Keydata products.
Money for the FSCS payments will come out of the £57m provision set aside by N&P to pay Keydata Lifemark investors.
The FSCS says it is “considering” what this means for levy payers. IFAs contributed £93m out of a total industry levy of £326m to pay for FSCS claims relating to Lifemark investments bought through Keydata.
The building society announced that it had set aside up to £57m to pay Keydata investors earlier today.
An N&P spokeswoman says: “We will be repaying the FSCS and the balance will go to customers.”
She adds that while the majority of N&P customers have already sought redress through the FSCS, some may have claims over the £48,000 limit and therefore would be eligible to claim through N&P.
The society is writing to Keydata investors inviting applications for ex gratia payments to transfer rights to the investment to N&P.
Payments to customers will see the return of the original investment plus interest.
A spokesman for the FSCS says: “We confirm the FSCS is in discussions with N&P about the compensation costs of Keydata Investment Services relating to the building society. This is in relation to investors who have already been compensated by the FSCS.”
He says N&P’s decision is a positive development for both N&P members who invested in Keydata funds and for levy payers.
He adds: “We are considering what it means for levy payers and will liaise with the relevant trade organisations on the issue.”