PARLIAMENTARY WRITTEN QUESTION
London Capital & Finance: Compensation (16 January 2023)

To ask the Chancellor of the Exchequer, with reference to the London Capital & Finance (LCF) Compensation Scheme, who the LCF scheme operator is; and for what reason the LCF Scheme Operator deducts 20 per cent from the amount determined under Step Two.

Asked by:
Mohammad Yasin (Labour)

The government had established a compensation scheme for investors in the failed minibond issuer, London Capital & Finance plc (LCF). The Scheme launched on 3 November 2021 and the Financial Services Compensation Scheme (FSCS) administered the Scheme on behalf of the government. Almost all eligible bondholders have now received compensation and a total of £115m has been paid out by the scheme.

The Scheme paid 80% of bondholders’ principal investment in eligible bonds, up to a maximum of £68,000. Where bondholders had received interest on their bonds, distributions from the insolvency administrators, or compensation from the FSCS for LCF bonds, this reduced the amount of compensation payable under the Scheme. This appropriately balanced the interests of both bondholders and the taxpayer and ensured that all LCF bondholders receive a fair level of compensation in respect of the financial loss they have suffered.

Further detail about the scheme can be found online at: www.gov.uk/lcf-compensation-scheme

Answered by:
Andrew Griffith (Conservative)
19 January 2023