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Written Question
London Capital & Finance: Compensation
Thursday 19th January 2023

Asked by: Mohammad Yasin (Labour - Bedford)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the London Capital & Finance (LCF) Compensation Scheme, who the LCF scheme operator is; and for what reason the LCF Scheme Operator deducts 20 per cent from the amount determined under Step Two.

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

The government had established a compensation scheme for investors in the failed minibond issuer, London Capital & Finance plc (LCF). The Scheme launched on 3 November 2021 and the Financial Services Compensation Scheme (FSCS) administered the Scheme on behalf of the government. Almost all eligible bondholders have now received compensation and a total of £115m has been paid out by the scheme.

The Scheme paid 80% of bondholders’ principal investment in eligible bonds, up to a maximum of £68,000. Where bondholders had received interest on their bonds, distributions from the insolvency administrators, or compensation from the FSCS for LCF bonds, this reduced the amount of compensation payable under the Scheme. This appropriately balanced the interests of both bondholders and the taxpayer and ensured that all LCF bondholders receive a fair level of compensation in respect of the financial loss they have suffered.

Further detail about the scheme can be found online at: www.gov.uk/lcf-compensation-scheme


Written Question
London Capital and Finance: Insolvency
Monday 5th July 2021

Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the Answer of 4 February 2021 to Question 148019 on London Capital and Finance: Insolvency, what progress the Government has made on setting up a compensation scheme which will assess whether there is justification for further compensation payments in certain circumstances for some LCF bondholders.

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

I know that this has been a very difficult time for LCF bondholders. The Government has announced that it will establish a compensation scheme that will provide 80% of LCF bondholders’ principle investment up to a maximum of £68,000. The scheme will be available to all LCF bondholders who have not already received compensation from the Financial Services Compensation Scheme (FSCS).

The Treasury is working to finalise the details of the scheme and guidance for bondholders on their next steps. The Government will provide further details on how the scheme will operate in due course. Bondholders do not need to do anything at this stage.

The Financial Services Compensation Scheme (FSCS) will administer the Scheme. They are committed to ensuring that payments are made to all eligible LCF bondholders within 6 months of the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill securing Royal Assent. This Bill was brought forward by the Government at the earliest possible opportunity and was introduced on 12 May 2021.

I hope that the compensation offered by the Government scheme will offer some relief to the distress and hardship suffered and provide closure on this difficult matter.


Written Question
London Capital and Finance: Insolvency
Wednesday 3rd March 2021

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

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment has been made of potential similarities between the investment schemes marketed by Ready2Invest Limited and the collapse of London Capital & Finance Plc.

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

This is a matter for the Financial Conduct Authority (FCA), which is operationally independent from Government. The question has been passed on to the FCA. The FCA will reply directly to the honourable Member by letter. A copy of the letter will be placed in the Library of the House.


Written Question
London Capital and Finance: Insolvency
Monday 8th February 2021

Asked by: Jessica Morden (Labour - Newport East)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, when he plans to publish the (a) timetable for and (b) details of the compensation scheme for LCF bondholders.

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

I refer the Honourable Member to my answer given on 4 February to PQ UIN 148019. In my answer I explained that my Written Ministerial Statement of 17 December 2020 set out the three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.

My Written Ministerial Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.


Written Question
London Capital and Finance: Insolvency
Thursday 4th February 2021

Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, when he plans to publish details on the Government’s approach to the compensation scheme for London Capital & Finance bondholders.

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

I refer the Honourable Member to my answer given on 28 January to PQ UIN 143081. The Written Ministerial Statement of 17 December 2020 set out the three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.

The Written Ministerial Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.


Written Question
London Capital and Finance: Insolvency
Thursday 4th February 2021

Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the report of the Independent Investigation into the Financial Conduct Authority’s Regulation of London Capital & Finance plc by Dame Elizabeth Gloster, published in November 2020, whether the 11,625 London Capital & Finance bondholders will be offered compensation for their losses.

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

I refer the Honourable Member to my answer given on 28 January to PQ UIN 143081. The Written Ministerial Statement of 17 December 2020 set out the three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.

The Written Ministerial Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.


Written Question
London Capital and Finance: Insolvency
Monday 1st February 2021

Asked by: Dan Jarvis (Labour - Barnsley Central)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the Written Statement of 17 December 2020, Financial Services Update, HCWS678, what progress has been made in compensating the bondholder victims of London Capital & Finance plc.

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

The Government recognises that this has been a very difficult time for LCF bondholders. That is why on 23 May 2019, following a request from Charles Randell, Chair of the FCA, we formally directed the FCA to launch an independent investigation into the events at LCF, and approved the FCA’s appointment of Dame Elizabeth Gloster to lead it.

Dame Elizabeth’s independent investigation considered the events and circumstances surrounding the failure of LCF and whether, in its supervision of LCF, the FCA discharged its functions in a manner which enabled it to effectively fulfil its statutory objectives. Dame Elizabeth delivered her report to the FCA on 23 November 2020, and the report alongside the FCA’s response was published on 17 December 2020. A Written Ministerial Statement was made on the same day setting out the Government’s response. These documents are available online at gov.uk.

Dame Elizabeth makes nine recommendations for the FCA. The Government welcomes the FCA’s apology to LCF bondholders and their commitment to implement Dame Elizabeth’s recommendations.

HM Treasury has also accepted the four recommendations that Dame Elizabeth Gloster made for the government regarding the regulatory regime. The Written Statement set out the steps that the Government will be taking to implement them.

As set out in the Written Statement, there are three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.

The Written Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.


Written Question
London Capital and Finance: Insolvency
Monday 1st February 2021

Asked by: Steve Baker (Conservative - Wycombe)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to Dame Elizabeth Gloster's report entitled, Independent Investigation into the Financial Conduct Authority’s Regulation of London Capital & Finance plc, published on 23 November 2020, what steps he has taken to implement the recommendations of that report and re-compensate bondholders.

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

The Government recognises that this has been a very difficult time for LCF bondholders. That is why on 23 May 2019, following a request from Charles Randell, Chair of the FCA, we formally directed the FCA to launch an independent investigation into the events at LCF, and approved the FCA’s appointment of Dame Elizabeth Gloster to lead it.

Dame Elizabeth’s independent investigation considered the events and circumstances surrounding the failure of LCF and whether, in its supervision of LCF, the FCA discharged its functions in a manner which enabled it to effectively fulfil its statutory objectives. Dame Elizabeth delivered her report to the FCA on 23 November 2020, and the report alongside the FCA’s response was published on 17 December 2020. A Written Ministerial Statement was made on the same day setting out the Government’s response. These documents are available online at gov.uk.

Dame Elizabeth makes nine recommendations for the FCA. The Government welcomes the FCA’s apology to LCF bondholders and their commitment to implement Dame Elizabeth’s recommendations.

HM Treasury has also accepted the four recommendations that Dame Elizabeth Gloster made for the government regarding the regulatory regime. The Written Statement set out the steps that the Government will be taking to implement them.

As set out in the Written Statement, there are three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.

The Written Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.


Written Question
London Capital and Finance: Insolvency
Thursday 28th January 2021

Asked by: Alex Sobel (Labour (Co-op) - Leeds North West)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the findings of the Report of the Independent Investigation into the Financial Conduct Authority’s Regulation of London Capital & Finance plc, published 23 November 2020, what the timetable is for the FCA to pay compensation under the complaints scheme to bondholders.

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

I refer the Honourable Member to my answer given on 21 January to PQ UIN 138838. As set out in my Written Ministerial Statement of 17 December 2020, there are three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.

The Written Ministerial Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.


Written Question
London Capital and Finance: Insolvency
Thursday 28th January 2021

Asked by: Alex Sobel (Labour (Co-op) - Leeds North West)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how the Government's compensation scheme that was announced in response to the Report of the Independent Investigation into the Financial Conduct Authority’s Regulation of London Capital & Finance plc, published on 23 November 2020, will be administered.

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

I refer the Honourable Member to my answer given on 21 January to PQ UIN 138838. As set out in my Written Ministerial Statement of 17 December 2020, there are three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.

The Written Ministerial Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.