FCA/FSCS objectives


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11 weeks ago by
Does the FCA/FSCS seek to minimize it's own compensation liabilities when agreeing the basis for cost allocation to clients accounts?

For example, smaller clients could have a greater cost allocation %age which would be covered by the £50,000 compensation, allowing larger clients losses to be mitigated/avoided. The FCA/FSCS compensation would be maximized to cover more/all of the costs.

During the cost allocation process, is it the FCA/FSCS's objective to avoid this and minimize their own liabilities instead?

Any insight would be appreciated.







Community: Beaufort Clients
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It would seem that this would be their objective in the first place. But the FCA have 'screwed-up' big time in this case by ignoring their own objectives of protecting investors. So it's possible that they realize this and might be more willing to take a hit in this particular case.

The cost allocation is decided between PwC and the creditors' committee (CC) after which it's up-to the FSCS to approve it. The CC is exploring different options (including the one you mention) with PwC and the FSCS is a member in these meetings.

We are also pushing for the costs to still come down from £55m, and this would be beneficial to the FSCS scheme and investors. (Not so much for PwC!)




written 11 weeks ago by Nandish  
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I think our plight would be helped enormously if it received much greater news coverage.

If the public realized that ringfenced assets are at risk, the outrage/unrest this would generate might persuade the authorities to cover the losses in this instance or make further compensation available to us.


written 11 weeks ago by Daniel Parr  
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We're doing our best to get the issues publicised. Today's Sunday Telegraph article, which I was interviewed for, will help. See https://www.allanswered.com/post/erzpv/press-on-the-campaign/ for that article and all the other publicity we've generated.

Note that the FSCS are only observers on the creditors' committee, but PwC's distribution plan will need to be approved by the FCA, as well as by the CC.
written 11 weeks ago by Mark Bentley  
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Sharesoc's campaign is doing a great job and your teams  efforts are greatly appreciated.
written 11 weeks ago by Daniel Parr  
The man at Beaufort i spoke too said our ring fenced share account cant be touched and will be transferred to a broker of there choice ,you can then transfer your holdings to your preferred account ,seemed to know what he was talking about dont know how      the other situations are with money in accounts ,but seems our shares cannot be touched and will be transferred in there entirety
written 11 weeks ago by ron marshall  
Hi Ron,

That is not strictly true (in that it's not to say the assets can't be touched). The assets are currently controlled by PwC. However, what you say is what we expect to happen. PwC are seeking to avoid a need to sell any assets and to transfer them to another broker, but the costs will have to be paid somehow, preferably mainly by the FSCS, otherwise from client monies. Accounts without sufficient money, and not adequately covered by the FSCS, will have to find cash from somewhere.

PwC are likely to insist that assets in any given account will not be transferred to another broker until the costs are paid. If necessary (unlikely to be necessary in most cases), this can be done by taking out a short term loan to pay the costs, which can be repaid by asset sales, once the assets have been transferred to another broker.

All of this, and the apportionment of costs, is to be covered in the distribution plan which PwC will prepare, and which needs to be approved by the creditors' committee, the FCA and the Court.
written 11 weeks ago by Mark Bentley  
Thanks Just have to wait and see methinks 
written 11 weeks ago by ron marshall  
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ShareSoc will not just be waiting & seeing. We'll be offering input to the creditors committee, to achieve the best possible outcome for Beaufort clients. PwC's feet need to be held to the fire, to ensure the process proceeds as quickly as possible and that costs are minimised. The CC has a tough job and a lot of work to do. We will be watching closely to make sure the job gets done.
written 11 weeks ago by Mark Bentley  
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If the FCA/FSCS does seek to minimise its liability I would be very interested to hear their arguments. Publication of the Investment Bank Special Administration Rules created a risk for the investing public, a risk that is neither now or ever has been publicised (unlike the risks attached to share trading). I believe the publication of, and guarding against, financial risk of this sort is well within the remit of the regulator which on this occasion appears to have either not noticed its existence or has chosen to ignore it as shown by the Beaufort employee who still openly maintaining Nominee Account monies are 'Ringfenced'. The only way for the FCA/FSCS to minimise their contribution is by controlling costs generated by PWC (which ShareSoc is so admirably trying to do)

PWC on the other hand, may well see another way to control costs is to sell the Beaufort Client Book to the highest bidder whether or not it coincides with Clients choice. PWC must indicate ALL the detail (including any potential adverse effects) of precisely how they propose to handle the transfer WELL in advance so that Clients can make some attempt to protect their interests.

I can only admire and thank Mark and his colleagues for all they are trying to do in this shameful affair
written 11 weeks ago by Dr Chris Owens  
PWC on the other hand, may well see another way to control costs is to sell the Beaufort Client Book to the highest bidder whether or not it coincides with Clients choice. PWC must indicate ALL the detail (including any potential adverse effects) of precisely how they propose to handle the transfer WELL in advance so that Clients can make some attempt to protect their interests.

This is what will be done come September 2018 ; a block transfer of assets to another broker will be carried out. This broker will be chosen by PwC and once the assets are transferred, individual clients can decide to transfer them elsewhere.

PwC will give clients a choice as to who they would like the assets to be transferred to, however this will only rack up costs for everybody. My suggestion would be to allow assets to transfer to their nominated broker and then deal with the new broker for a transfer to your preferred broker.
written 11 weeks ago by Nandish  
Yes the man at beaufort told me that they are transferring our holdings to a broker of there choice ,he said to not complicate matters get them transferred to there choice of broker then transfer them to u=our won broker
written 11 weeks ago by ron marshall  

1 Answer


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11 weeks ago by
Me too i admire everybody who is speaking out for the Clients of Beaufort ,The FCA and the FSCS dont seem to want to help i sent them an E-Mail but got no reply !
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