The Financial Services Compensation Scheme (FSCS) is expecting to pay out £60m in claims against failed ARM bonds distributor Catalyst during 2014/15.
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This was highlighted in FSCS’s November outlook, which already showed that the scheme had reportedly secured about 4,000 claims against Catalyst as well as had settled 1,800 claims with compensation estimated at a total of about £26m.
Catalyst, which promoted funds backed by Luxembourg-based ARM Asset Backed Securities, was announced in default by the FSCS and censured by the Financial Conduct Authority in October last year.
Following the firm’s default, investors in the Luxembourg-domiciled ARM life settlement fund, which was not under the compensation scheme, became eligible to claim compensation.
The decision to invite claims against the company resulted in pushing up investment advisers’ share of the FSCS levy by £30m.
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By GlobalDataThe scheme projected £159.5m in investment claims for the present year, which is £27.1m more than the budgeted £132.4m, but brought £30.9m more from last year than initially budgeted, which implied that levy total remained same at £112m.
