18th July 2014
As outlined in the FSCS Annual Report and Accounts 2013/14, FSCS has made significant recoveries in relation to the Keydata default. This is both through the litigation we are pursuing against a large number of IFA firms in connection with their selling of Keydata-related products, and in our claim against Lifemark, which issued a number of the Keydata Bonds.
The IFA litigation is ongoing, but FSCS has reached settlements with a significant number of defendants. In the claim against Lifemark, Lifemark’s Trustee is close to finalising the realisation of Lifemark’s former assets and has distributed the proceeds of those assets realised so far. FSCS, standing in the shoes of the Keydata claimants it has compensated, has received payments from PricewaterhouseCoopers (PwC), Keydata’s administrators, following the realisation of Lifemark’s assets.
Before FSCS can allocate the recoveries it has made to the appropriate investment funding classes, FSCS must first calculate the amounts payable to claimants out of the recoveries, and deduct the costs in pursuing these recoveries. For further information about this process, and how FSCS will determine the proper allocation of recoveries between the investment funding classes, please see our Position Statement. FSCS will update firms shortly regarding the progress of these calculations, as well as likely timescales for the allocation to the funding classes. Once the calculations have been finalised, FSCS will need to work with the FCA in order to distribute the monies to the relevant sectors. We will publish an account of the Keydata recoveries action in due course, once all material steps have been completed.