FIN.

Treasury announces mini-bond compensation scheme

HM Treasury has set out details of a scheme to compensate bondholders who lost money due to the collapse of London Capital & Finance (LCF). The scheme will provide 80% of LCF bondholders’ initial investment up to a maximum of £68,000 and will be available to all LCF bondholders who have not already received compensation from the Financial Services Compensation Scheme (FSCS).

The FSCS has been able to protect around 2,8000 bondholders, paying out over £57 million in compensation. Under the new scheme, the government expects to pay out c.£120 million to around 8,800 people.

Treasury has also launched an open consultation on proposals to bring the issuance of mini-bonds within the scope of FCA regulation.

Lucy Hadrill