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<p>The Government recognises that this has been a very difficult time for LCF bondholders.
That is why on 23 May 2019, following a request from Charles Randell, Chair of the
FCA, we formally directed the FCA to launch an independent investigation into the
events at LCF, and approved the FCA’s appointment of Dame Elizabeth Gloster to lead
it.</p><p> </p><p>Dame Elizabeth’s independent investigation considered the events
and circumstances surrounding the failure of LCF and whether, in its supervision of
LCF, the FCA discharged its functions in a manner which enabled it to effectively
fulfil its statutory objectives. Dame Elizabeth delivered her report to the FCA on
23 November 2020, and the report alongside the FCA’s response was published on 17
December 2020. A Written Ministerial Statement was made on the same day setting out
the Government’s response. These documents are available online at gov.uk.</p><p>
</p><p>Dame Elizabeth makes nine recommendations for the FCA. The Government welcomes
the FCA’s apology to LCF bondholders and their commitment to implement Dame Elizabeth’s
recommendations.</p><p> </p><p>HM Treasury has also accepted the four recommendations
that Dame Elizabeth Gloster made for the government regarding the regulatory regime.
The Written Statement set out the steps that the Government will be taking to implement
them.</p><p>As set out in the Written Statement, there are three main channels through
which London Capital & Finance plc (LCF) bondholders can seek compensation. These
are the administration process, the Financial Services Compensation Scheme (FSCS),
and the Financial Conduct Authority’s (FCA) Complaints Scheme.</p><p> </p><p>The Written
Statement also set out that, taking into consideration the specific and complex set
of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation
scheme which will assess whether there is justification for further one-off compensation
payments in certain circumstances for some LCF bondholders. The Government will announce
further details in due course.</p><p> </p>
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