Pritchard Stockbrokers Limited
- I had “deposited” money with Pritchard so can I expect £85,000 compensation from FSCS?
- Should I wait for the promised 50p in the pound (£) dividend from the Special Administrators in July, or make a claim with FSCS instead? What can I claim from FSCS if I get the dividend first?
- Pritchard acted as custodian to clients. Can Merchant Capital clients claim from FSCS?
- Can I make a claim to FSCS now?
- Does FSCS compensate for missing stocks and shares?
- What happens if my losses are over the FSCS maximum of £50,000 and I accept the FSCS’s compensation?
- For corporate accounts, will FSCS be sending one application form for the whole account, or separate application forms for individual clients within that account?
- How will my compensation be calculated, and what compensation will I receive from FSCS?
- What if I believe I am suffering financial hardship and need my claim to be considered urgently?
- If I receive compensation from the Special Administrators can I still pursue a claim with FSCS?
- What if I held money accounts in currencies other than British Pounds (GBP)?
- What if I held funds in an ISA or a SIPP account?
- I have some queries about the claim form supplied by Mazars. Can FSCS help me?
- How long will FSCS take to process my claim?
- Why have I received more that one application form?
1. I had “deposited” money with Pritchard so can I expect £85,000 compensation from FSCS?
No. Pritchard was not a deposit-taker so the money held does not qualify under regulatory rules as a deposit. The money will be treated as an investment, which carries maximum FSCS compensation of £50,000 per person. FSCS has no discretion to pay any more.
2. Should I wait for the promised 50p in the pound (£) dividend from the Special Administrators in July, or make a claim with FSCS instead? What can I claim from FSCS if I get the dividend first?
It is for individuals to choose which claim to pursue, but it is possible to have a claim in both places at the same time. If FSCS pays first, your legal rights will be transferred to FSCS (as a condition of the payment of compensation). FSCS will then claim in the Administration, standing “in your shoes”, and receive all future dividends that would otherwise have been due to you. FSCS will pay some or all of that dividend on to you to seek to ensure that you are no worse off for coming to FSCS first. If the Special Administrators pay first, in calculating the loss that you have suffered for its purposes, FSCS will deduct that dividend amount(s) and pay you up to £50,000 to cover your remaining shortfall.
3. Pritchard acted as custodian to clients. Can Merchant Capital clients claim from FSCS?
Yes, Merchant Capital clients are eligible for compensation from FSCS.
4. Can I make a claim to FSCS now?
FSCS will soon begin issuing application forms to potential claimants. When you receive the application form, you should complete it and then return it in the pre-paid envelope provided. FSCS will only be able to deal with claims once the Special Administrators confirm how much each person is owed by Pritchards. The Special Administrators cannot confirm this to FSCS until each person agrees their account balance with them first. The Special Administrators have indicated that they issued letters to confirm account balances with individuals in July. If you have not already done so, we advise you to agree your account balance with the Special Administrators as soon as possible so that we are then able to process their claim.
5. Does FSCS compensate for missing stocks and shares?
FSCS is aware that there are some clients who may have a claim in relation to a shortfall in their share holdings. We are currently liaising with the Special Administrators to determine the value of the loss incurred by each individual and the best process for compensating such clients. We will keep customers informed about our progress by providing an update on our website when in a position to do so.
6. What happens if my losses are over the FSCS maximum of £50,000 and I accept the FSCS’s compensation?
If you choose to accept compensation from FSCS, you will be required to assign (or legally transfer) to FSCS all of your rights to claim in the Administration. FSCS will then claim in the Administration standing “in your shoes” and will claim for the whole of your loss, even if it was over £50,000. When FSCS receives the dividends in your place it will then pay to you any amounts recovered to ensure that you do not suffer a disadvantage for having accepted FSCS compensation first.
- Loss = £80,000
- FSCS compensation = £50,000
- Dividend of 50p/£ received 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
- Loss = £100,000
- FSCS compensation = £50,000
- Dividend of 50p/£ received 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 make a full recovery of its £50,000 before it starts paying its dividend recovery on to claimants.
Claimants are not compelled to claim from FSCS, or to accept the FSCS offer of compensation. If a person does not want to transfer his legal rights to claim in the Administration to FSCS in return for accepting the payment of compensation, then s/he can decline our compensation and continue his claim in the Administration. After s/he has received the dividend(s), s/he can then return to FSCS to claim for any remaining shortfall.
7. For corporate accounts, will FSCS be sending one application form for the whole account, or separate application forms for individual clients within that account?
We are waiting for data from the Special Administrators about corporate accounts. Once we have received and reviewed these details, we will arrange for the relevant individuals or entities to be sent the apprporiate application form(s).
8. How will my compensation be calculated, and what compensation will I receive from FSCS?
This will be based on the account balance / information FSCS receives from the Special Administrators. FSCS can pay up to £50,000 in compensation per claim.
9. What if I believe I am suffering financial hardship and need my claim to be considered urgently?
Once a claim has been made to FSCS, if any claimants believe that FSCS should treat their case as a priority because they are facing immediate financial hardship, 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.
However, please note that FSCS cannot progress claims until claimants have agreed their account balances with the Special Administrators.
10. If I receive compensation from the Special Administrators can I still pursue a claim with FSCS?
Yes you can. However, when calculating your compensation FSCS will deduct any payments you have received from the Special Administrators from your final compensation amount, which will be subject to a maximum of payment £50,000.
11. What if I held money accounts in currencies other than British Pounds (GBP)?
Clients who had balances held in a currency other than sterling are advised that their client balance has been converted into sterling at the official exchange rate (the mean of the buying and selling spot rates prevailing in the London market as published) at the close of business on 10 February 2012.
12. What if I held funds in an ISA or a SIPP account?
FSCS will compensate clients who held funds in ISA and SIPP accounts.
For claimants who wish to transfer their Pritchard Stockbrokers Limited ISA accounts to another provider, please refer to http://www.hmrc.gov.uk/isa/isa-reinstatement.pdf for further information.
Any queries you have in relation to the tax status of these deposits should be referred to HM Revenue & Customs.
13. I have some queries about the claim form supplied by Mazars. Can FSCS help me?
No. Any queries regarding this application form should be directed to Mazars.
14. How long will FSCS take to process my claim?
If claimants who have returned a completed Application Form to FSCS are found to be eligible, FSCS will seek to pay (in most cases) as soon as possible. Although we cannot give exact timescales for this, claims will be settled well within our usual turnaround of six months for this type of claim, providing claimants have agreed a balance with The Special Administrators.
15. Why have I received more that one application form?
As Mazars have contacted clients to agree balances on an individual account basis, the FSCS will also register claims for each individual account. Therefore, clients who held more than one account with Pritchard or Merchant Capital will receive more than one application form.
The account for which a particular application form refers to is indicated by the Mazars reference number which appears on the application form. We advise claimants to complete all application forms as fully as possible.