FSCS mulls Rockingham compensation
Failed IFA firm advised and sold bonds issued by life settlements firm Arm Asset Backed Securities.
The Financial Services Compensation Scheme is investigating whether it should provide compensation to customers of Rockingham Independent, the IFA firm that was placed into liquidation on 30 March this year.
According to the FSCS, Rockingham advised on and sold bonds issued by Luxembourg-based Arm Asset Backed Securities, a life settlements firm that is currently at risk of collapse and is considering restructuring options.
Specifically, Arm issued the Arm Assured Income Plan and the Arm Capital Growth Bond products, backed by senior life settlement policies bought in the secondary market and sold by distributors such as Rockingham to investors in the UK and abroad.
Arm had been struggling to stay afloat since summer 2011, and was refused a license to trade in August 2011 by the Luxembourg regulator the CSSF.
Most recently, Arm investors have demanded increased transparency on restructuring deals under consideration.
Rockingham was placed into administration earlier this year following a raft of claims against it from Arm investors, prompting advisers to voice conerns over the potential for a fresh FSCS levy.
FSCS said in a statement that it cannot predict how long its investigation will take but promises to provide updates on developments “as they occur”.