Recommendation 27

The collapse of LCF brought about a huge degree of uncertainty for bondholders, some of whom were faced with an anxious wait for the publication of Dame Elizabeth’s report and further details of the Government’s compensation scheme. We welcome the approach that the Treasury has taken to compensate LCF bondholders, a scheme that we believe will provide substantial assistance to a very large proportion of those who have lost out and who have not qualified under other forms of compensation available. The Government has taken a reasonable approach in striking the balance between consumer responsibility for their investment decisions and recognising the FCA’s failure to discharge its functions in respect of LCF such that it fulfilled its statutory objectives. We support the principle of the Bill to provide compensation to LCF bondholders.