Arrangements for a scheme to compensate investors in a failed financial services firm have cleared the Commons.

London Capital & Finance (LC&F) went into administration in January 2019, leaving 11,600 investors facing losses of £237 million.

Measures in the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill include arrangements for a compensation scheme for customers who were not eligible for redress from the Financial Services Compensation Scheme (FSCS).

Work and pensions minister Guy Opperman told the Commons: “It is important to avoid creating the misconception that Government will stand behind all bad investments in the future where FSCS does not apply.

“The Government will establish a scheme based on the level of FSCS compensation capped at £85,000 under the FSCS.

“We have looked at the issues carefully and are satisfied that the individual circumstances surrounding LC&F are completely unique.”

He added: “There are…

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