LQD Markets (UK) Limited


1. What is FSCS’s role in relation to LQD Markets (UK) Limited (LQD Markets) (in special administration)?

Matthew Wild, Matthew Haw and Graham Bushby of Baker Tilly Restructuring and Recovery LLP were appointed as joint special administrators of LQD Markets on 02 February 2015.  Formal notice of their appointment and further information about the special administration is available to view at: www.bakertilly.insolvencypoint.com/1069879

FSCS declared LQD Markets in default on the same day.

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2. What is the level of protection provided by FSCS?

FSCS can pay compensation to eligible customers up to £50,000 per person for claims against LQD Markets relating to investment business regulated by the Financial Conduct Authority.

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3. Who is eligible for compensation from FSCS?

To qualify for compensation you must be eligible under the Financial Conduct Authority’s COMP rules which set out which types of claim are eligible for compensation, and limit how much compensation we are allowed to pay. 

Generally speaking, we can only accept claims from individuals and small companies that have carried out investment business with LQD Markets.

Full details of who is eligible to benefit from FSCS protection can be found in subsection 4.2 of the COMP Rules: http://fshandbook.info/FS/html/FCA/COMP/4/2

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4. How do I agree my claim amount?

Customers and creditors of LQD Markets can find information and updates on the joint special administrators dedicated microsite at www.bakertilly.insolvencypoint.com/1069879 

Please forward a copy of your most recent statement to lucy.griffiths@bakertilly.co.uk. Please email this address if you are unable to locate your statement to confirm the amount you believe to be held in your account.

Customers who are eligible for FSCS compensation must first agree their balance with the joint special administrators. Any compensation paid by FSCS will be based on your agreed balance up to the investment compensation limit of £50,000.

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5. Will I be receiving an application form from FSCS?

FSCS will send application forms to customers with agreed account balances shortly. You will need to complete this form and return it to us.

If you have not received an application form after agreeing your account balance, contact FSCS’s Customer Services Team on +44 (0)207 741 4100.

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6. When will I receive compensation from FSCS?

FSCS will compensate customers up to £50,000 based on the agreed balances determined by the joint special administrators.  

Please forward a copy of your most recent statement to lucy.griffiths@bakertilly.co.uk. Please email this address if you are unable to locate your statement to confirm the amount you believe to be held in your account.

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7. How will my compensation be calculated?

FSCS will compensate customers up to £50,000 based on the agreed balances determined by the joint special administrators.  

Please forward a copy of your most recent statement to lucy.griffiths@bakertilly.co.uk. Please email this address if you are unable to locate your statement to confirm the amount you believe to be held in your account.

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8. What currency will my FSCS compensation be paid in?

FSCS will pay compensation in US Dollars. This ensures that payments will be consistent with the settlement of Client Money Entitlement made with the joint special administrators.

Where a conversion is required from GBP, FSCS will convert to USD Dollars with reference to the Bank of England daily exchange rate of 1.5166 as at 28 January 2015.

FSCS can pay compensation of up to £50,000 per claimant. The USD equivalent of this amount, as at 28 January 2015, was $75,830.

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9. How will FSCS compensation be paid to me?

Compensation will be paid directly to the bank account you nominate in the LQD claims process.

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10. Should I wait to receive a dividend from the joint special administrators, or make a claim with FSCS instead? What can I claim from FSCS if I get the dividend from the joint special administrators first?

You must choose which claim to pursue, but it is possible to register a claim with both the joint special administrators and FSCS.  

If you make a claim to FSCS and that claim is eligible for compensation, we will take assignment of your claim in the joint special administration of LQD Markets once compensation has been paid. This means we will receive all distributions from the joint special administrators and will pay some, or all, of the dividend to you if you would suffer disadvantage from the earlier acceptance of FSCS compensation. 

If the joint special administrators pay a dividend before FSCS pays compensation, FSCS will deduct that amount from your agreed balance and pay you up to £50,000 to cover your remaining shortfall.

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11. If I am paid compensation, is it correct that my legal rights are assigned to FSCS? What does that mean?

If FSCS pays compensation, a claimant will be required to assign their legal rights in relation to their claim to FSCS. Using these rights, FSCS will seek to recover the total value of the claim against LQD’s estate.

If you have received an FSCS payment you will have assigned your rights to us. This means that any dividend you would have received from the special administration will now be paid to FSCS. 

The compensation payment is in full and final settlement of your claim for compensation from FSCS. Your rights against LQD Markets and any relevant third parties are also assigned to FSCS. 

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12. What happens if I have received compensation for my losses from a third party? Can I still claim compensation from FSCS?

If at any time you receive money from anyone other than FSCS or the joint special administrators relating to your LQD Markets losses, you must immediately declare it to FSCS and the joint special administrators.  

FSCS pays compensation for financial losses suffered only where those losses cannot be paid by anyone else. It is a requirement of your agreement with FSCS that you have not received compensation for your LQD Markets losses from anyone else.  Your agreement with FSCS assigns your legal rights to claim against LQD Markets to FSCS, and requires you to repay FSCS if you receive a recovery from anyone else. 

If you have assigned your legal rights to claim against LQD Markets to someone else before you apply to FSCS, you are not entitled to any compensation payment. If you receive any payment from a third party after you receive FSCS compensation, you are legally obliged to inform FSCS and, if required to do so, to repay some or all of the compensation paid to you by FSCS. 

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13. What happens if my losses are over the £50,000 compensation limit and I accept compensation from FSCS?

If you choose to accept FSCS compensation, you will be required to assign all of your legal rights to claim in the special administration of LQD Markets to FSCS. FSCS will then claim in the administration and will claim for the whole of your loss, including any amount over £50,000. When FSCS receives the dividends it will then pay back to you any amounts that you would otherwise have received if you had accepted the dividends before claiming on FSCS. Our rules require that you do not suffer a disadvantage whether you claim from us first or whether from the special administrators first. 

The following examples illustrate this, based on a hypothetical dividend of 50p/£1, and with all amounts in GBP.

Example 1:

  • Loss = £80,000
  • FSCS compensation = £50,000
  • Dividend of 50p/£ received from the joint special administrators by FSCS = £40,000
  • FSCS pays £30,000 to claimant so he is fully compensated (total £80,000), and retains £10,000 recovery for itself

Example 2

  • Loss = £100,000
  • FSCS compensation = £50,000
  • Dividend of 50p/£ received from the joint special administrator by FSCS = £50,000
  • FSCS pays £50,000 to claimant so he is fully compensated (total £100,000), and retains nothing for itself

FSCS does not have to have made a full recovery of its £50,000 before it starts paying its dividend recovery on to customers. 

Customers are not obliged to claim through FSCS, or to accept FSCS’s offer of compensation.  If you do not want to assign your LQD Markets claim to FSCS in exchange for compensation, then you can refuse FSCS compensation and continue your claim in the administration. After you have received the dividend(s) you can return to FSCS to claim for any remaining shortfall. 

You should tell the joint special administrator immediately if you choose to pursue your claim with them directly.

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