The FSCS is facing angry calls from both IFAs and investors to make its decision-making process more transparent, after two controversial judgments involving Lifemark-backed Keydata bonds and Lehman Brothers-backed NDF products.
At present, the FSCS must determine which activities have caused investor losses and then assign compensation costs. It has no express duty to consult on how it reaches these decisions or the levy amount. In the Keydata case, law firm Regulatory Legal, acting for IFAs, called the FSCS decision to class the failed investment firm as an ‘intermediary’ for levy purposes “absurd”, during a judicial review. At the hearing at Birmingham High Court last week, it also accused the FSCS of failing to listen adequately to industry calls to re-examine its stance during a consultation. Now a se...
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