20th July 2011
The Financial Services Authority (FSA) announced in June that it has been in discussions concerning the CF Arch Cru Investment Funds and the CF Arch Cru Diversified Funds. As a result of these discussions, Capita Financial Managers Limited, BNY Mellon Trust & Depositary (UK) Limited and HSBC Bank PLC agreed a £54 million package. This will be used to make payments to certain investors in the CF Arch Cru Funds.
Following the FSA’s announcement, the FSCS has been considering the implications of this development for claims it has received against independent financial advisors. In particular, the FSCS has been considering the duties and obligations of financial advisors at the time that they advised their clients to invest in these Funds. This will enable the FSCS to reach a view on whether the advice might give rise to liabilities to investors.
The FSCS is also considering how it would value the CF Arch Cru Funds, if it became appropriate to pay compensation in relation to the Funds. This work needs to engage with the orderly wind up of the Funds which is being overseen by Capita Financial Managers Limited. If payments are made from the £54 million package, the FSCS will also need to consider how to take into account these payments when calculating compensation that may be due to an investor.
Our work on these two issues is ongoing. However, we would like to assure investors that we working as quickly as possible, and will provide more certainty about our position to claimants as soon as we are able.
We will provide a further update on our website when we have more information.