The United Kingdom’s Treasury department announced on Monday the government compensation scheme for the victims of London Capital & Finance (LCF), who were till now receiving compensation under the Financial Services Compensation Scheme (FSCS).
The FSCS already distributed around £57 million in compensation to 2,878 bondholders of the collapsed financial scheme. However, the government formed a new compensation scheme due to the complexity and sheer size of the now-collapsed LCF.
Maximum Pay-Out of £68,000
In a long official statement, the Economic Secretary to the Treasury, John Glen, detailed that the new government scheme will provide 80 percent of LCF bondholders’ initial investment up to a maximum of £68,000 against the FSCS’s £85,000 protection.
The government is expecting to distribute a total pay-out of around £120 million to the bondholders within 6 months of securing the necessary primary legislation.
LCF was issuing unregulated non-transferable debt securities, popularly known as ‘mini-bonds' and then speculatively invested the funds in several underlying businesses. The company collapsed in 2019 and affected around 12,000 investors, who suffered a combined loss of £236 million.
The new government scheme will only compensate victims who did not receive anything under the FSCS scheme. Moreover, it will exclude bondholders who received interest Payments
Payments
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
Read this Term from LCF or distributions from the administrators.
“The scheme will be available to all LCF bondholders who have not already received compensation from the FSCS and represents 80% of the compensation they would have received had they been eligible for FSCS protection,” Glen wrote.
Defending the lowered compensation limit, Glen detailed that around 97 percent of all LCF bondholders invested less than £85k, and so their claim will neither touch the cap of the government scheme nor the FSCS.
“Bondholders do not need to do anything at this stage and government will provide further details on how the scheme will operate in due course,” Glen added. “The scheme will be simple and straightforward to navigate.”
The United Kingdom’s Treasury department announced on Monday the government compensation scheme for the victims of London Capital & Finance (LCF), who were till now receiving compensation under the Financial Services Compensation Scheme (FSCS).
The FSCS already distributed around £57 million in compensation to 2,878 bondholders of the collapsed financial scheme. However, the government formed a new compensation scheme due to the complexity and sheer size of the now-collapsed LCF.
Maximum Pay-Out of £68,000
In a long official statement, the Economic Secretary to the Treasury, John Glen, detailed that the new government scheme will provide 80 percent of LCF bondholders’ initial investment up to a maximum of £68,000 against the FSCS’s £85,000 protection.
The government is expecting to distribute a total pay-out of around £120 million to the bondholders within 6 months of securing the necessary primary legislation.
LCF was issuing unregulated non-transferable debt securities, popularly known as ‘mini-bonds' and then speculatively invested the funds in several underlying businesses. The company collapsed in 2019 and affected around 12,000 investors, who suffered a combined loss of £236 million.
The new government scheme will only compensate victims who did not receive anything under the FSCS scheme. Moreover, it will exclude bondholders who received interest Payments
Payments
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
Read this Term from LCF or distributions from the administrators.
“The scheme will be available to all LCF bondholders who have not already received compensation from the FSCS and represents 80% of the compensation they would have received had they been eligible for FSCS protection,” Glen wrote.
Defending the lowered compensation limit, Glen detailed that around 97 percent of all LCF bondholders invested less than £85k, and so their claim will neither touch the cap of the government scheme nor the FSCS.
“Bondholders do not need to do anything at this stage and government will provide further details on how the scheme will operate in due course,” Glen added. “The scheme will be simple and straightforward to navigate.”
