Maltese investors who hold securities issued by ARM (tranches 1 to 11) will be treated in the same way as UK investors, the UK Financial Services Compensation Scheme (FSCS) has decided.

However, it is not certain whether each and every investor will be given compensation. All claims will be considered on a case-by-case basis. The maximum compensation that an investor can receive amounts to GB£50,000.

The Malta Financial Services Authority (MFSA) in a statement said that over the past few months it had held talks with the UK Financial Services Compensation Scheme (FSCS) to determine whether Maltese investors in ARM securities can make claims against Catalyst Investment Group Limited.

Last January, the MFSA had announced that the FSCS was considering whether Catalyst, a company (now in liquidation) in the UK and which was the promoter for ARM in the UK and Malta, could be liable for some losses sustained by investors in ARM.

An ad-hoc committee beingset up by BDO UK, the provisional liquidators of ARM Asset Backed Securities S.A. is a completely separate and different process from the one being undertaken by the FSCS.

The provisional liquidators have determined that the committee would be composed of four bondholders as well as the UK’s Financial Services Compensation Scheme (FSCS) and the Malta Financial Services Authority on an ex officio basis.

The MFSA has agreed to perform this role in the exclusive interest of the Maltese investors.

The role of the ad-hoc committee would be to act as the representative body of bondholders with which the Provisional Liquidator would consult at regular intervals. Information of a non-public, confidential nature and price sensitive nature will be provided to the members of the ad-hoc committee.

This ad-hoc committee will have no executive powers. Therefore, if the provisional liquidators, after having obtained feedback from the ad hoc committee, decide, for example, to propose a restructuring process a vote on this proposal will need to be taken by all the bondholders.

MFSP Financial Management Ltd issued a separate statement confirming the FSCS decision.

 

 

 

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