23rd May 2018
FSCS has made its first compensation payments to customers of the failed Discretionary Fund Manager (DFM), Strand Capital Limited.
Payments of £5.7m have been made to 796 customers over the last two weeks. The recent payments were in respect of client cash only. As the relevant investments were held in SIPPs, the compensation payments were made direct to customers' SIPPs.
Since the reconciliation of client cash has not yet been completed, and shortfalls have yet to be finalised, FSCS has stepped in and has compensated in relation to the whole cash balance held by clients, up to the £50,000 limit.
Eligible customers who held cash through other SIPP providers, or directly with Strand, will receive compensation payments over the next few weeks.
This is just the first step in returning funds to Strand customers. The payments made this week go a long way towards returning customer cash. FSCS will continue to work with the Joint Special Administrators (JSAs) of Strand so that customers get back their assets as soon as possible. We anticipate that a conclusion to this part of the process will require the JSAs to seek court approval of a distribution plan, which is likely to be a number of months away.
Some customers will also have had cash in excess of £50,000.
Because FSCS compensated customers, any distribution of client money by the JSAs will come to FSCS in the first instance, but FSCS will pass on recoveries we receive in accordance with our rules, which, for example, allow us to pass on recoveries that are in excess of the amount of compensation that we have paid to a customer.