The CF Arch Cru Funds (“CF Arch Cru”) represent two Open Ended Investment Companies (“OEICs”), both of which are umbrella companies for six sub-funds. The sub-funds were substantially invested in a combination of 21 cell companies incorporated in Guernsey (the “Cells”), which were in turn invested in various assets.
Shares in the two OEICs were typically sold to investors through independent financial advisors. Some CF Arch Cru investments were sold as direct investments whilst others are held via third party providers (e.g. as part of pensions).
FSCS is considering claims against failed independent financial advisors in relation to advice they may have provided to consumers to invest into the CF Arch Cru funds.
We are only able to deal with claims in relation to firms (such as independent financial advisors) which are no longer trading and are not in a position to meet the cost of compensation themselves. A firm needs to be declared ‘in default’ by FSCS before FSCS is able to pay compensation.
It is for the claimant to set out why they consider they have an eligible claim against their independent financial advisor; for example, by providing details of why they consider that their advisor gave them bad advice to invest into a CF Arch Cru fund.
We may conclude that the advice given by the advisor was reasonable, or that the claim is not eligible for compensation under FSCS’s rules for other reasons. If this is the case, FSCS would not be able to accept the claim or pay compensation.
You will need to contact FSCS to ask for an FSCS application form. Once you have returned your application form FSCS will be able to commence its investigations into your claim.
If you have any questions, or wish to request an application form, you can contact FSCS’s Initial Contact Team on 020 7741 4100 or free on 0800 678 1100, or by email at: firstname.lastname@example.org.
When submitting your completed application form, you should provide all relevant documentation, such as:
Note, if your independent financial advisor is still trading, you should contact that particular firm direct, rather than contacting FSCS.
Once a claim has been made to FSCS, if any claimant believes FSCS should treat their case as a priority because they are facing immediate financial hardship, or if other extenuating circumstances exist, they should let FSCS know as soon as possible. Where there is immediate financial hardship, we will do what we can to accelerate the handling of the claim.
For claims against investment firms declared in default since 1 January 2010, FSCS can pay compensation to eligible claimants up to a maximum of £50,000 per person, per firm.
For claims against investment firms declared in default before 1 January 2010, FSCS can pay compensation to eligible claimants up to a maximum of £48,000 (100% of the first £30,000 and 90% of the next £20,000) per person, per firm.
The FSCS’s protection is governed by the FCA's Compensation (“COMP”) Rules, located in the Redress section of the FCA’s Handbook . The COMP Rules set out who is eligible to benefit from the protection provided by the FSCS.
For example, generally speaking, 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 to benefit from the FSCS protection can be found in subsection 4.2 of the COMP Rules (part of the FCA’s Handbook).
Yes. Under the statute and rules by which we operate and the terms of FSCS's application form, upon the payment of compensation, claimants are typically required to transfer or assign to FSCS their legal rights in their entirety against the firm in default and/or any relevant third parties. In other words, FSCS then "stands in the shoes" of the claimants. However, for CF Arch Cru investments, claimants will keep their rights to make a claim in the payment scheme administered by Capita Financial Managers Limited. Relying on such rights that are transferred to it, FSCS seeks to recover all or part of the cost of compensation. Such recoveries are used to mitigate the cost of levies on financial services firms, which are raised to fund the operation of FSCS and the payment of compensation.
To the extent that the amount recovered in relation to an individual claim exceeds the amount paid in compensation, after costs of recovery, FSCS forwards the recovery to the claimant.
FSCS is not a party to the payment scheme administered by Capita Financial Managers Limited and cannot give advice as to whether or not to accept the offer. It should be noted that investors’ ability to make claims to FSCS in respect of advice received from their independent financial advisors would not be affected as a result of accepting an offer under the Capita payment scheme.
You should also note that FSCS will deduct the amount that you are likely to receive if you claim through the Capita payment scheme, regardless of whether you choose to actually make the claim to Capita. If you choose not to make a claim to Capita, FSCS will not make up the shortfall.
FSCS is not a party to the payment scheme. Investors can contact Capita Financial Managers Limited which administers the scheme. The company’s contact details are as follows:
Telephone: 0845 6080958 (CFML Technical Services) for investors in the UK and +44 203 367 8275 for investors overseas.
Post: Capita Financial Managers Limited, Technical Services, 2 The Boulevard, City West One Office Park, Gelderd Road, Leeds LS12 6NT.
Further information is also available on the website at www.capitafinancial.com under the “investor communications” section.
Note: It may be that you purchased your investment in CF Arch Cru Funds via a platform, fund manager, wrapper or product provider (e.g. an investment provider or pension provider such as Standard Life, Transact, Royal Skandia or Canada Life). In this case it is likely that the offer will come from one of these types of firm as your nominee or product provider. We suggest you contact them regarding this.
An investor’s ability to claim from the FSCS in respect of advice received from their independent financial advisor would not be affected as a result of accepting an offer under the payment scheme.
However, the amount offered under the payment scheme being administered by Capita Financial Managers Limited will be taken into account in calculating any compensation awarded by the FSCS, regardless of whether or not the offer under the payment scheme is claimed (as per question 6 above).
No. The offer under the payment scheme is from Capita Financial Managers Limited and the two depositaries. Claims made to FSCS relating to other parties, for example claims made in respect of advice given by independent financial advisors, can still be made.
The FSCS will deduct the amount you were eligible to receive from the Capita Payment Redress Scheme from any compensation payment, regardless of whether or not you have accepted and received it. This is because we believe investors are responsible for their decision not to accept the amount offered under the Capita Redress Scheme.
If you have any queries you can contact FSCS’s Initial Contact Team on 020 7741 4100 or free on 0800 678 1100. You can also email us at: email@example.com.
Further information is also available on FSCS’s website: www.fscs.org.uk.
The consumer redress scheme was created by the Financial Conduct Authority (FCA) in 2013 in light of the issues surrounding the collapse of the CF Arch Cru funds. The Consumer Redress Scheme was designed to pay compensation as full and final settlement to eligible claimants based on what the investor would have invested in had the investment matched their risk profile. The FCA has said both the CF Arch Cru Investment and Diversified funds were high-risk products and should only have been recommended to investors who fully understood, and were willing and able to accept the risks.
If the advice you received was unsuitable, the Consumer Redress Scheme puts you in the position you would have been in if you had received suitable advice.
Compensation is, therefore, calculated by comparing the current value of your CF Arch Cru fund investment(s) at the calculation date(s) with the value of an appropriate comparable investment at the same date(s). The calculation takes account of all monies you have received relating to your CF Arch cru fund investment(s). This includes any income received prior to suspension, any payments from the wind down of funds, the CF Arch cru payment scheme and/or the Capita Hardship Scheme.
The Net Asset Values (NAV) can be found on Capita’s website: http://www.capitafinancial.com/567.cshtml