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Written Question
Blackmore Bond: Insolvency
Thursday 20th April 2023

Asked by: Feryal Clark (Labour - Enfield North)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps (a) his Department and (b) the Financial Conduct Authority are taking to (i) investigate the collapse of Blackmore Bond plc and (ii) ensure consumer protections on related matters.

Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)

The Financial Conduct Authority (FCA) is responsible for ensuring consumer protection for a broad range of financial services products and HM Treasury works closely with the FCA to maintain a strong and safe financial system.

The FCA does not have power to investigate a firm that is unauthorised and not carrying out any regulated activities. Blackmore Bond Plc was not authorised by the FCA and the sale of the ‘mini-bond’ product it offered was not an activity regulated by the FCA. Where problems fall outside the FCA’s statutory remit, they assist other agencies and regulators wherever they can. In the case of Blackmore Bond, the FCA passed relevant information to the City of London Police.


Written Question
Blackmore Bond: Insolvency
Monday 27th February 2023

Asked by: Drew Hendry (Scottish National Party - Inverness, Nairn, Badenoch and Strathspey)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of establishing a judge-led inquiry on the Financial Conduct Authority's handling of Blackmore Bonds plc.

Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)

The Government considers it is important that there are appropriate mechanisms in place to ensure the financial services regulators are accountable for all aspects of their performance.

The Financial Conduct Authority (FCA) is responsible for ensuring consumer protection for a broad range of financial services products and HM Treasury works closely with the FCA to maintain a strong and safe financial system. However, the FCA does not have power to investigate a firm that is unauthorised and not carrying out any regulated activities.

Blackmore Bond Plc was not authorised by the FCA and the sale of the ‘mini-bond’ product it offered was not an activity regulated by the FCA. The Government therefore has no plans to establish a judge-led inquiry into the FCA’s handling of the collapse of Blackmore Bond plc.


Written Question
Blackmore Bond: Insolvency
Monday 27th February 2023

Asked by: Drew Hendry (Scottish National Party - Inverness, Nairn, Badenoch and Strathspey)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of extending access to the Financial Services Compensation Scheme to all those affected by the collapse of the Blackmore Bond plc.

Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)

The Government considers it is important that there are appropriate mechanisms in place to ensure the financial services regulators are accountable for all aspects of their performance.

The Financial Conduct Authority (FCA) is responsible for ensuring consumer protection for a broad range of financial services products and HM Treasury works closely with the FCA to maintain a strong and safe financial system. However, the FCA does not have power to investigate a firm that is unauthorised and not carrying out any regulated activities.

Blackmore Bond Plc was not authorised by the FCA and the sale of the ‘mini-bond’ product it offered was not an activity regulated by the FCA. The Government therefore has no plans to establish a judge-led inquiry into the FCA’s handling of the collapse of Blackmore Bond plc.


Written Question
Blackmore Bond: Insolvency
Friday 3rd February 2023

Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions he has had with Cabinet colleagues on addressing the accountability of financial regulators after the collapse of Blackmore Bond plc.

Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)

The Government considers it is vitally important that there are appropriate mechanisms in place to ensure the financial services regulators are accountable for all aspects of their performance.

The FCA is responsible for ensuring consumer protection for a broad range of financial services products. However, it does not regulate all financial services firms and products. Blackmore Bond Plc was not authorised by the FCA and the sale of the ‘mini-bond’ product it offered was not an activity regulated by the FCA.


Written Question
Blackmore Bond: Insolvency
Thursday 22nd September 2022

Asked by: Fleur Anderson (Labour - Putney)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions he has had the Financial Conduct Authority on the collapse of Blackmore Bond.

Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)

HM Treasury works closely with the FCA to maintain a strong and safe financial system. Treasury Ministers and officials regularly meet with the FCA to discuss a variety of matters.

The FCA does not have power to investigate a firm that is unauthorised and not carrying out regulated activities. Where problems fall outside the FCA’s statutory remit, they assist other agencies and regulators wherever they can. As Blackmore Bond was an unregulated firm, the FCA passed the relevant information to the City of London Police.

In November 2019, the FCA temporarily banned the promotion of high-risk ‘speculative illiquid securities’ to ordinary retail investors. This ban covers the type of mini-bonds sold by Blackmore Bond. This ban was made permanent in January 2021.

In April 2021, the Treasury launched a consultation on proposals for bringing mini-bonds within the scope of regulation. On 1 March 2022 the Treasury set out its intention to include non-transferable securities, including mini-bonds, within the scope of the Prospectus Regime Review. Issuers of mini-bonds would be required to offer their securities via a platform which would ensure appropriate due diligence and disclosure and be regulated by the FCA.


Written Question
Blackmore Bond: Insolvency
Wednesday 14th September 2022

Asked by: Catherine West (Labour - Hornsey and Wood Green)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will call for an independent inquiry into the Financial Conduct Authority's handling of the collapse of Blackmore Bonds.

Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)

The Financial Conduct Authority (FCA) is responsible for securing an appropriate degree of consumer protection across a broad range of financial services products. However, it does not regulate all financial services firms and products. Blackmore Bond Plc was not authorised by the FCA and the sale of the ‘mini-bond’ product it offered was not an activity regulated by the FCA. The FCA does not have power to investigate a firm that is unauthorised and not carrying out any regulated activities. The Government therefore has no plans to commission an independent inquiry into the FCA’s handling of the collapse of Blackmore Bond plc.


Written Question
Blackmore Bond: Insolvency
Tuesday 31st May 2022

Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to provide compensation to victims of the collapse of Blackmore Bond plc.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Financial Conduct Authority (FCA) is responsible for ensuring consumer protection for a broad range of financial services products. However, it does not regulate all financial services firms and products. Blackmore Bond Plc was not authorised by the FCA and the sale of the ‘mini-bond’ product it offered was not an activity regulated by the FCA. The FCA does not have power to investigate a firm that is unauthorised and not carrying out any regulated activities. The Government therefore has no plans to commission an independent inquiry into the FCA’s handling of the collapse of Blackmore Bond plc.

The Financial Services Compensation Scheme (FSCS) is the compensation scheme of last resort for financial services. The FSCS is an independent non-governmental body that carries out its compensation function within rules set by the FCA and the Prudential Regulation Authority (PRA), who are also independent of Government. The FSCS can only pay compensation in respect of certain regulated activities and the Government is unable to intervene or comment on specific cases and decisions taken by the FSCS.

It is an important point of principle that the Government does not step in to pay compensation in respect of failed financial services firms that fall outside of the FSCS. Doing so would create the wrong set of incentives for individuals and an unnecessary burden on the taxpayer.

In April 2021, the Treasury launched a consultation on proposals for bringing mini-bonds (also known as Non-Transferable Debt Securities) within the scope of regulation. On 1 March 2022 the Treasury published a response setting out its preferred approach and intentions for taking this proposal forward.


Written Question
Blackmore Bond: Insolvency
Tuesday 31st May 2022

Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to commission an independent inquiry into the regulators' handling of the collapse Blackmore Bond plc.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Financial Conduct Authority (FCA) is responsible for ensuring consumer protection for a broad range of financial services products. However, it does not regulate all financial services firms and products. Blackmore Bond Plc was not authorised by the FCA and the sale of the ‘mini-bond’ product it offered was not an activity regulated by the FCA. The FCA does not have power to investigate a firm that is unauthorised and not carrying out any regulated activities. The Government therefore has no plans to commission an independent inquiry into the FCA’s handling of the collapse of Blackmore Bond plc.

The Financial Services Compensation Scheme (FSCS) is the compensation scheme of last resort for financial services. The FSCS is an independent non-governmental body that carries out its compensation function within rules set by the FCA and the Prudential Regulation Authority (PRA), who are also independent of Government. The FSCS can only pay compensation in respect of certain regulated activities and the Government is unable to intervene or comment on specific cases and decisions taken by the FSCS.

It is an important point of principle that the Government does not step in to pay compensation in respect of failed financial services firms that fall outside of the FSCS. Doing so would create the wrong set of incentives for individuals and an unnecessary burden on the taxpayer.

In April 2021, the Treasury launched a consultation on proposals for bringing mini-bonds (also known as Non-Transferable Debt Securities) within the scope of regulation. On 1 March 2022 the Treasury published a response setting out its preferred approach and intentions for taking this proposal forward.


Written Question
Blackmore Bond: Insolvency
Wednesday 26th May 2021

Asked by: Justin Madders (Labour - Ellesmere Port and Neston)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions he had with people who lost their life savings as a result of the collapse of Blackmore Bond Plc prior to making the decision not to establish a compensation scheme.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

I am acutely aware of the situation at Blackmore Bond plc, and I am mindful that many individuals have lost money after investing in minibonds with the firm, which must be extremely distressing.

The Financial Services Compensation Scheme (FSCS) is the compensation scheme of last resort for financial services. The FSCS is an independent non-governmental body that carries out its compensation function within rules set by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), who are also independent of Government. Its scope is strictly limited and it can only pay compensation when a relevant regulated activity has been undertaken.

It is an important point of principle that the government does not step in to pay compensation in respect of failed financial services firms that fall outside of the FSCS. Doing so would create the wrong set of incentives for individuals and an unnecessary burden on the taxpayer.

However, as you will be aware, the government has taken the extraordinary step of establishing a compensation scheme for another failed minibond firm, London Capital & Finance (LCF). The government has considered the issues carefully, and the situation at LCF is unique and exceptional. While other minibond firms have failed, LCF is the only minibond firm which was authorised by the FCA and sold bonds in order to ‘on-lend’ to other companies. In particular, Blackmore Bond plc was not authorised by the FCA, and was not undertaking a regulated activity.

While I have not seen evidence that would indicate that the regulatory failings at the FCA were the primary cause of the losses incurred by LCF bondholders, they are a significant factor that the government has taken into account when deciding to establish this scheme.


Written Question
Blackmore Bond: Insolvency
Tuesday 16th March 2021

Asked by: Peter Grant (Scottish National Party - Glenrothes)

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what specific steps his Department is taking in response to the statutory report filed with his Department by the Joint Administrators of Blackmore Bond plc on the conduct of the Directors of Blackmore Bond plc during the three years immediately prior to the company going into administration.

Answered by Paul Scully

The content of the joint administrators’ report on the conduct of the directors of Blackmore Bond Plc is currently being investigated by the Insolvency Service.