CF Arch Cru investor’s pre April 2013


1. What is CF Arch Cru?

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).

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2. What is the Consumer Redress Scheme?

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.  

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3. If I opt-in to the Consumer Redress Scheme will I receive a final payment when the fund is wound up?

No, if you opt-in to the Consumer Redress Scheme the payment will be full and final settlement.

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4. If I don’t opt-in to the Consumer Redress Scheme and continue with the original compensation method when will I receive another pay-out?

The CF Arch Cru funds were due to be wound up in 2015 by Capita.  Unfortunately, this has not been the case and Capita has advised that because of the complexity of the overseas funds it could be several more years before they are wound up (not before the end of 2018). Until the funds have been wound up and crystallised (sold), the FSCS will not be making any further interim payments under the original compensation arrangement.

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5. How will the amount of compensation I am owed be calculated?

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.

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6. Where can I find the valuations used in my calculations under the Consumer Redress Scheme?

Please contact Link Fund Solutions (formerly Capita Financial Managers Limited) for this information.

 

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7. Will I be better off opting for the Consumer Redress Scheme or waiting for the CF Arch Cru fund to be wound up?

There is no means of knowing now because we cannot tell what the value of the Arch Cru funds will be when they are eventually wound up.   By accepting the redress scheme, you will receive a final compensation payment immediately, but will not be able to seek further compensation from FSCS if, when the funds are eventually wound up, you still have losses.  If you wait for the funds to be wound up, FSCS will make a final compensation payment which fully covers your losses after allowing for any compensation you have already received from FSCS and the Capita Payment Redress Scheme.

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8. If the calculation under the Consumer Redress Scheme approach results in a ‘no loss’ could I revert back to the original method and have my claim reassessed upon crystallisation of the fund?

No, once you request to have your claim assessed under the Consumer Redress Scheme approach FSCS will make a final decision regardless of outcome.

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9. If I accept the redress scheme in final settlement, does that mean I also lose my claim on the funds themselves?

No, you will still own the funds and receive whatever value is left when the funds are wound up.  But, by accepting the redress scheme you will not be able to make further claims to FSCS if you still have uncompensated losses when the funds are wound up.

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10. What if I believe I am suffering financial hardship or have other extenuating circumstances and need my claim to be considered urgently?

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.

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