ARM investors lobby Treasury committee over FSA stance

Investors in a struggling life settlements fund have written to Treasury Select Committee chairman Andrew Tyrie demanding action to prevent the FSA from influencing the fund’s restructuring.

A steering group of investors in the suspended ARM Asset Backed Securities fund said the FSA had no jurisdiction over the fund, which is attempting to redomicile from Luxembourg to Ireland as part of an ongoing restructuring.

In a letter to Mr Tyrie, seen by Investment Adviser, the steering group accused the “discredited” FSA of “poking [its] unwanted nose” into the process of screening bidders for the ARM fund’s restructuring.

The investors quoted an email, apparently sent between members of the committee charged with assessing bids, which states that the FSA was “enquiring” about compliance roles and “expressed their willingness to assist the committee” with compliance and governance issues.

The question-and-answer section of the FSA’s website states that the regulator does not have any powers over ARM. However ARM’s UK-based distributor, Catalyst Investment Group, is authorised and regulated by the FSA, which has referred Catalyst to its enforcement division.

In a response, the FSA has said it liaised with ARM’s board “to try and ensure that the takeover selection process is in the best interests of UK investors”.

The steering group, many of whom are former clients of IFA Rockingham Retirement, which was fined £35,000 by the FSA for sales of ARM and other unregulated products, also accused the FSA of forcing Rockingham into liquidation. The FSA has described the liquidation as “voluntary”.

The steering group’s letter said: “Since the FSA has... treated our direct approaches with something of a contemptuous and aggressive attitude, we are looking for an appropriate person to intervene and convey our concern.”