By ADRIAN LOWCOCK 22/10/2009
If the experiences of Keydata investors is anything to go by, investors with funds held in NDF Administration and Defined Returns are likely to wait a long time before they find out whether they will get all their money back.
NDF Administration (NDFA) & Defined Returns (DR)
Both providers have been placed into administration by the Financial Services Authority (FSA) after errors were identified in their marketing literature, which could lead to heavy claims from investors in products backed by Lehman Brothers. The move follows an FSA review of UK structured product providers, which looked into firms' systems and controls and marketing literature.
Approximately 3,500 customers are affected and they may be entitled to make a claim for compensation through the Financial Services Compensation Scheme (FSCS). If so, they will be covered to a maximum of £48,000. This process will take time and investors will need to remain patient.
Accountants Grant Thornton have been appointed as the administrator for both companies and a telephone helpline has been set up for investors: 0844 770 2203.
Keydata
The FSCS stated at the end of September investors will have to wait a further two months to find out if they can claim compensation. Due to legal complications, the FSCS will not know until November if investors are entitled to compensation. There are two groups of clients that are affected:
Investors in Keydata Secure Income Bonds Issues 1,2 & 3
The FSCS is determining if Keydata was responsible for the loss of £103 million invested in traded life settlement, which is currently being investigated in an international fraud probe. There are approximately 5,500 investors are affected.
Keydata Structured Products ISAs
There are also approximately 23,000 people invested in the Keydata products which broke ISA rules. The FSCS is investigating whether investors can reclaim the lost tax relief back in compensation.
If there is anything you wish to discuss regarding this article please call one of our Advisers on 020 7189 9999.