Dolfin - FSCS coverage position
Claims to FSCS in relation to T1IV bonds
Claims to FSCS in relation to unrealisable custody assets
Claims to FSCS in relation to reslisable custody assets
Claims to FSCS in relation to client money
Claims to FSCS in relation to corporate action income
Claims to FSCS in relation to Dolfin acting as a i) a custodian and / or ii) a sub-custodian
Claims from customers to FSCS in relation to T1IV Bonds
Background
The T1IV Bonds are the Bonds that customers invested into in order to participate in the Tier 1 Visa Scheme. Those Bonds are:
1. Altafinch UK PLC (Company Number 11047040) - ALTAFI 0 12/12/27;
2. Artek Group PLC (now Finerbase Ltd) (Company Number 09351898) - ARTKGP 6 3/4 01/28/25;
3. Artek Group PLC (now Finerbase Ltd) (Company Number 09351898) - ARTKGP 0 12/15/26;
4. Data Grid Solutions PLC (Company Number 10728804) - DAGRSO 0 06/12/27; and
5. Camsem Investment PLC (Company Number 11873745) - CAMSEM 0 06/24/29
(together, the T1IV Bonds).
The T1IV Bonds are unlikely to qualify as designated investments under our rules. Designated investments refer to specific types of financial products that are covered by FSCS in the event of a provider’s failure.
Where a customer’s claim submitted to FSCS has an element that relates to Custody Asset Transfer Costs in respect of T1IV Bonds, this element of the cost is unlikely to be compensable under our rules.
Claims from customers to FSCS in relation to unrealisable custody assets
Background
Some of Dolfin’s clients also invested in shares in companies and bonds, which are not T1IV Bonds. These assets have been classified as unrealisable and / or illiquid and / or have little to no economic value, or Custody Asset Transfer Costs would exceed the value of the assets (together, the Unrealisable Custody Assets).
Where a customer’s claim submitted to FSCS has an element that relates to Custody Asset Transfer Costs in respect of Unrealisable Custody Assets, this element is unlikely to be compensable under our rules.
Claims from customers to FSCS in relation to realisable custody assets
BackgroundSome of Dolfin’s clients also invested in shares in well-known companies and bonds, which are not T1IV Bonds, and which are realisable (i.e., have an economic value and can be traded on a secondary market) (together, the Realisable Custody Assets).
Where a customer’s claim submitted to FSCS has an element that relates to Custody Asset Transfer Costs for Realisable Custody Assets, this element is likely be compensable under our rules.
Claims from customers to FSCS in relation to client money
BackgroundAs stated on our Dolfin website, the JSAs are able to deduct costs associated with distributing client money from the client money pool (Client Money Transfer Costs).
Customers who apply to FSCS are, in most cases, likely to be entitled to have the balance of their client money restored in full. This means FSCS would cover the costs deducted by the JSAs for distributing client money from the client money pool being the Client Money Transfer Costs.
At the date of publication of this statement, FSCS is aware that the JSAs are currently making an interim distribution of client money. Because this is not the final distribution, the final percentage deduction for Client Money Transfer Costs has not yet been determined.
FSCS considers that customer losses will only be finalised once the final amount of client money to be distributed, as well as the final costs to be deducted, are known. As a result, FSCS is not yet open to claims relating to Client Money Transfer Costs. We expect that, by the time the Court approves the Distribution Plan, the final position on Client Money Transfer Costs will be clearer. FSCS will monitor developments and provide an update when more information is available.
For clarity, FSCS will not compensate customers in relation to any client money shortfalls that derive from or were intended for use in any of the T1IV Bonds.
Claims from customers to FSCS in relation to corporate action income
BackgroundCorporate Action Income (CAI) is money customers of Dolfin may be due including dividends on their shares.
The quantification date for FSCS is the specific date used to determine the value of a customer’s losses and therefore the amount of compensation they can receive from FSCS. For Dolfin, the quantification date is 30 June 2021 (being the date of the court order for the special administration). CAI, and any claim in respect of it, arises after the quantification date. For this reason, any costs or shortfall associated with the cost of passing on CAI are not a compensable loss for FSCS’s purposes.
Where a customer’s claim submitted to FSCS has an element that relates CAI, this element is unlikely to be compensable under our rules.
Claims from customers to FSCS in relation to Dolfin acting as a (i) a custodian and / or (ii) a sub-custodian
BackgroundIn April and May 2018, the Maltese entity Dolfin Asset Services Limited (DASL) entered into agreements with Dolfin for the purposes of Dolfin acting as (i) a custodian to provide custody and ancillary services for the securities, cash, distributions and monies deposited by DASL with Dolfin for safekeeping and owned by the customers of DASL and (ii) a sub-custodian under depositary agreements that DASL would enter into with collective investment schemes; this was in order for Dolfin to provide custody and ancillary services for the securities and cash deposited by DASL with Dolfin for safekeeping and owned by the underlying customers of DASL.
FSCS’s coverage position for these claims is complex. FSCS is in contact with the legal representative of DASL regarding these claims.