FSCS claws back £100m from Keydata collapse; returns half to fund managers

The Financial Services Compensation Scheme (FSCS) has recovered £100m from the estate of failed traded life settlement firm Keydata, and the advisers who mis-sold it, and will rebate half the sum to fund management levy payers.

Fund managers were forced to pay £233m towards the cost of compensating some 20,000 Keydata investors after the firm collapsed in 2009, because the investment advice sector, which was levied £93m, was unable to meet the full costs of the failure. Recovery work by the FSCS over the last two years gave it £30m to offset the costs of compensation and the costs of recoveries, which it said has benefited intermediaries though a lower levy. Now fund managers will see a rebate on their contribution, receiving £50m over the course of December. When the FSCS compensates investors it takes o...