Treasury financial secretary Mark Hoban has rejected MPs’ calls for an inquiry into Arch cru, while stressing that investors can pursue their IFA for compensation.
There was cross-party support for an inquiry into what went wrong with Arch cru in a parliamentary debate last week on the £54m Arch cru compensation package agreed by the FSA in June between Capita Financial Managers, BNY Mellon Trust & Depositary and HSBC.
Hoban said: “I am yet to be persuaded a section 14 inquiry is appropriate. It would certainly not be appropriate to announce one while enforcement action is being taken against any party to this.”
Financial Ombudsman Service awards against Capita, BNY Mellon and HSBC have to be in line with payments on offer through the compensation package. Hoban defended the move to restrict FOS redress to that available through the compensation deal, saying it ensured a consistent regulatory approach.
Alongside distributions already paid and remaining assets, the compensation package is designed to give investors around 70 per cent of the value of their assets when the fund range was suspended in March 2009.
Hoban added: “This limitation on the FOS is only in respect of complaints made about Capita, HSBC and BNY Mellon. There is a very clear signal to investors they can make further complaints about other parties.
“Investors are free to pursue the action through the courts and, of course, they are free to challenge their IFA, who may have advised them on investing in Arch cru funds, to see whether that advice was appropriate.”