13th July 2009
Global Trader Europe Limited went into administration on 15 February 2008 and was subsequently placed into liquidation on 17 June 2008. The Financial Services Authority declared Global Trader Europe Limited 'in default' on 13 July 2009. This means that the firm is unable, or likely to be unable, to pay claims against it. A declaration of default opens the way for consumers to claim compensation from the FSCS.
The FSCS assesses claims in accordance with our rules. Our rules (the COMP Rules) are written by the Financial Services Authority (FSA), and form part of the FSA Handbook. They can be found under Redress, Compensation on the FSA's website. The COMP Rules specify which types of claim are eligible for compensation, and limit how much compensation the FSCS is able to pay. For example, we can only accept claims from individuals and small companies. Overseas financial services institutions and large companies are excluded. Full details of who is eligible for FSCS protection can be found in subsection 4.2 of the COMP Rules.
Information provided by the Liquidators is being used to confirm the value of claims. We are also accounting for any dividend payments that a claimant has already received in calculating any compensation payable.
Assignment of rights
If the FSCS accepts a claim for compensation, under the terms of our offer of payment, a claimant will be required to assign to the FSCS all their rights in relation to their claim against Global Trader Europe Limited and any relevant third parties. This enables the FSCS to 'stand in the shoes' of investors in respect of their claim. Relying on these rights, the FSCS will seek to recover all or part of the cost of compensation from the liquidation estate. This means that the FSCS will hold the right to any further dividend distribution from the Liquidation in respect of claims for which it has taken an assignment.
In the event any further dividend is paid, the FSCS will seek to ensure that no investor is disadvantaged as a consequence of accepting the FSCS's offer rather than waiting for the future dividend to be paid first. This means that the FSCS may pass on to a claimant some or all of any dividend recovered by the FSCS in respect of their claim, if the claim has not otherwise been paid in full by the FSCS.
Further details of the assignment of rights can be found in subsection 7.2 of the COMP Rules.
We are trying to issue a decision on claims as quickly as possible, and hopefully within three months of the firm being declared in default, or receipt of an application form, whichever is later. If it becomes apparent that we will not be able to deal with a claim within this timescale, we will let the claimant know.