Catalyst payout delayed due to ‘complications’: FSCS

Investors who had money with the collapsed Catalyst Investment Group Limited have seen a delay in the claims process due to complications in gathering data from various sources, the Financial Services Compensation Scheme said.

In a recent update to investors, the FSCS said it is continuing to work with the provisional liquidators of Arm Asset Backed Securities SA, which was declared in default on 4 December, to gather the information it needs to finalise its claims’ process.

Catalyst was the primary UK distributor of life settlements products manufactured by Arm. It sold sold £54m worth of ARM bonds, which were backed by a portfolio of second-hand life insurance contracts that have since floundered.

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The portfolio is now being liquidated by a Luxembourg court.

In November the FSCS revealed investment advisers are likely to face a bill of close to £30m in the first quarter of 2014, after it FSCS announced a shortfall of £29.5m in the investment intermediary sub-sector in part related to compensation for Calayst investors.

In December the scheme added to advisers woes when it hinted millions of pounds could be added to bills to compensate non-UK investors in the failed fund distributor.

The FSCS said delays to compensation were due to liquidators of Arm needing to gather sources and that this had been “complicated by the need to gather data from various additional sources”.

It added: “We currently expect to be able to start inviting claims against Catalyst in February or March 2014. We will continue to provide periodic updates of our progress on our website and will contact affected consumers as soon as we are in a position to process claims.”

Earlier this month, the Financial Conduct Authority stripped the permissions from Catalyst sister company Catalyst Fund Management Limited for not having any authorised advisers. This was the first time a company has lost its permissions for this reason since the Retail Distribution Review came into effect.