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UK compensation scheme offers lifeline to Arch Cru investors

Investors in the ill-fated CF Arch Cru Funds have been offered the opportunity to have their claims reviewed and settled now by the Financial Services Compensation Scheme (FSCS), after it was revealed that the funds will not be wound up until December 2018 at the earliest.

UK compensation scheme offers lifeline to Arch Cru investors

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Arch Cru’s Guernsey-based funds were suspended in July 2009 as a result of liquidity problems, leading thousands of investors to lose capital.

Scheme administrators Capita Financial Manager recently announced the delay in winding up the two open-ended investment companies (Oeic), prompting the response from the FSCS on Wednesday.

Settling now

The consumer redress scheme, which calculates compensation for eligible CF Arch Cru related claims from 1 April 2013, was introduced by the Financial Conduct Authority’s (FCA) predecessor, the Financial Services Authority (FSA).

The scheme allows customers to receive a final settlement now, instead of waiting until Capita winds up the funds.

The FSCS is currently writing to all affected CF Arch Cru investors with more details.

Those wishing to have their claims reassessed under the consumer redress scheme must confirm this by responding to the letter.

Claims

Shares in the two Oeics were typically sold to investors through IFAs.

The FSCS is considering claims against failed IFAs in relation to the advice they may have provided to consumers to invest in the funds.

The compensation scheme, however, is only able to deal with claims relating to firms that are no longer trading and not in a position to meet the cost of compensation themselves.

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