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Bad news for NDF, DRL and Arc investors

Bad news for NDF, DRL and Arc investors

Category: Investments

Updated: 06/06/2017
First Published: 30/09/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Investors who held capital at risk products with NDF Administration, Defined Returns Limited (DRL) and Arc Capital and Income have been told they will not be able to bring valid claims for compensation through the Financial Services Compensation Scheme (FSCS).

Thousands of investors lost money when the firms failed almost a year ago due to their exposure to the collapse of Lehman Brothers.

However, having carried out extensive investigations, the FSCS said it was satisfied that the relevant marketing materials provided adequate and appropriate warnings that there was a risk to investors' capital if the organisation backing these investment products failed.

The investments defined as capital at risk products included the NDF Fixed Income or Growth Plan (February 2008), the NDF Fixed Income Plan (June 2008), DRL - Kick Out Performance Plan Issue 1, Arc Fixed Income Plan 6 and Arc - Stepped Kick Out Plan 5.

The FSCS said that as investors will not have claims arising from the marketing materials generally, it will therefore not send application forms to all known investors with capital at risk products.

It added, however, that if any investor wanted to submit a claim for any specific other reason, they could do so by emailing the FSCS to request an application form.

"At that time, investors should provide us with as much information as possible about why they believe their claim is eligible for compensation," said the FSCS.

"We will then assess claims for compensation on a case-by-case basis."

By completing the application form, investors have been told they will be able to set out why they believe they have a valid claim against NDF, DRL or Arc.

"Please be aware, however, that we can only accept a claim where a claimant can demonstrate to us that a legal liability is owed to him or her by one of the firms in default," the FSCS added.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.