FSCS Update - Customers of Rockingham Independent Limited

28th February 2013


The Financial Services Compensation Scheme (FSCS) will shortly be contacting individuals who have brought claims against Rockingham Independent Limited (Rockingham) in relation to ARM investments.  FSCS will be writing to confirm it is not able to pay compensation to these claimants under its rules.

About ARM Asset Backed Securities SA (“ARM”)

ARM is based in Luxembourg and is not authorised by the UK Financial Services regulator, the Financial Services Authority (FSA). ARM issued the ARM Assured Income Plan and ARM Capital Growth Bond products which are based on senior life settlement policies bought in the secondary market and sold via distributors to investors in the UK and Europe. The UK distributor of ARM products was Catalyst Investment Group Limited which sold the ARM bonds via various independent financial advisors (IFAs), including Rockingham.

Liability for losses

In order for FSCS to pay compensation, it must be satisfied that a firm owes a civil liability in respect of a claim. This means the claimant would have been likely to win a court case against Rockingham if it was still trading. Whilst we accept that Rockingham may potentially have given bad investment advice to some investors in respect of ARM investments, we do not consider that such advice can properly be said to have caused the losses which investors may have suffered. Therefore, FSCS does not consider that Rockingham owes a civil liability in respect of losses that claimants may have suffered in relation to ARM investments.

It is our view that the legal cause of investors’ losses was the decision of the Luxembourg regulator, the Commission de Surveillance du Secteur Financier (CSSF), to reject ARM's application for authorisation. We believe these were not the type of losses which Rockingham was legally responsible for warning investors about. For these reasons, FSCS believes Rockingham does not owe a civil liability to investors and, accordingly, we are unable to uphold claims.

Further information:
• Previous update about Rockingham Independent Limited
• FSA information for ARM investors
• Further information about FSCS