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NDFA on the brink of administration

Structured product provider NDF Administration is likely to be placed into administration this week, Money Marketing understands.

The FSA is expected to conclude that the firm is liable for losses on its Lehman-backed structured products. The firm has around £30m of investors money in Lehman-backed plans.

It is understood that Grant Thornton is likely to be appointed as an administrator.

The FSA is due to report back on the outcomes of its wider review of structured products later this month but it has given the Ombudsman the go-ahead to review individual complaints relating to the products.

Structured products from NDFA, DRL, Meteor, Arc and Legal & General are among those affected by Lehman’s collapse.

Last September NDFA and DRL warned investors in their structured products underwritten by Lehman Brothers that they should prepare themselves for substantial financial losses.

In September 2009 the Financial Ombudsman Service said it has received 160 complaints but it is estimated that £200m was invested by around 6,000 people in Lehman-backed savings products.

The FSA would not comment on individuals firms. NDFA refused to comment.

Meteor has released a statement to IFAs following the news. It says: “Following the article on October 13 regarding NDF and the possibility that they may enter administration. Clearly we are unable to comment on the situation regards any other firm but would confirm that we assisted the FSA earlier in the year in their review of Lehman backed products but have had no further contact with them regards this matter since this time.”

A spokesman for Arc Capital & Income says: “We have seen the article in Money Marketing on October 13 concerning NDFA and Lehmans backed products which notes that Arc also issued Lehmans backed products. We have held discussions with the FSA and are continuing to offer new products whilst dealing with the issues that they raised.”

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