Investment Banks: Client Protection

Lord Sharkey Excerpts

Wednesday 13th June 2018 Lords Chamber

[Lord Bates]

I hear what my noble friend says, but progress has been made. We have announced that the current threshold of £50,000 for the protection of assets by the Financial Services Compensation Scheme will increase to £85,000 from next April. That is a significant step in the right direction and it underscores again our commitment to small investors and small enterprises.

[Lord Sharkey (LD)]

Can the Minister say what steps are required to be taken to advise clients of the risks to their money held in client accounts in the event of failure or administration?

[Lord Bates]

There is a complex process involving the courts, the Financial Services Conduct Authority and the creditors’ committee. The amount of the fees of the administrator must be agreed and presented. There must be a timely distribution plan for the proceeds, and this must be announced. Also, these are all matters that can be challenged through the courts by relevant parties, and the Financial Services Compensation Scheme has already indicated that it will be looking for an independent assessor to be appointed to look at the level of fees being charged by the administrator in this case.