Keydata in administration

payless · 8 June 2009 at 3:50PM

Keydata in administration

http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=187956&d=340&h=341&f=342&nl=MM_BN&dep=webops&dte=080609

I've no idea how this effects plan holders, as different plans are structured in different ways with different underlying assets - If you have a plan you may want to speak to your IFA

payless · 8 June 2009 at 4:10PM

Investors, IFAs and other interested parties can contact 020 7804 4424 (PWC) for more information.

www.pwc.co.uk/KIS

Administrator PriceWaterHouse Coopers (PWC) says early indications suggest investors will not lose money as a result of Keydata going into administration.
A spokesperson for the FSA-appointed firm says it will work closely with the Financial Services Compensation Scheme (FSCS) in the coming weeks but adds there is "no early suggestion people will necessarily lose money".
However, she says the process may not be quick, adding it could take "anything between two weeks and 10 years" to complete.
Keydata Investment Services was today placed into administration on the grounds it is insolvent

kt · 9 June 2009 at 2:57PM

Both myself and my husband have fixed income plans with another couple of years to go. They are ISAs. Do you think that we will be eligible for any compensation we have under £30k invested but that is a lot of money to lose.

payless · 9 June 2009 at 3:04PM

Its early days, but rumour as it much of the money is ringfenced- and a buyout is a strong possibility anyway

kt · 9 June 2009 at 3:21PM

I apologise for my ignorance but does "ring fenced" mean that the creditors cannot withdraw the money? I presume therefore that it would be safer for me/us if this is the outcome.

dunstonh · 9 June 2009 at 3:31PM

Following on from payless, the market counterparty carries the liability for the product. That is not keydata. So, early indications are that investors money is safe as it is not included in the assets of keydata (ringfenced meaning that).

Latest news is that it is the HMRC that have forced them into this position due to an error on ISAs which HMRC have decided that customers shouldnt pay but Keydata should. The bill is £500 million.

payless · 9 June 2009 at 3:45PM

Whilst may not be theneed in this case - but the failure of the plan managers on such products ( ie Keydata ) can mean there is a loss for the plan holder - and in those cases the FSCS protection ( ie 100% £30K.... ) should come into play , the counterparty isk is another thing

mrcol · 9 June 2009 at 6:59PM

Some more info here..

http://www.pwc.co.uk/eng/issues/keydata_questions_and_answers.html

I am watching this with interest as i have a bit of money in one of the fixed income plans.

dunstonh · 9 June 2009 at 8:06PM

NDFA and a few others have come out and said they are interested in buying keydata.

Also, this announcement was just made by Skandia....(This doesnt relate to the keydata plans directly but keydata did have their hands in a number of pots.)

[FONT=&quot]You may have seen some media reports over the last 24 hours that have confirmed that Keydata Investment Services Limited (KISL) has been placed into administration on the grounds that it is insolvent. As Keydata plays a role within the Skandia Protected Portfolio Investment (PPI), which you may have recommended to clients in the past or may be considering recommending to clients now, we wanted to make you aware of the situation. [/FONT]
[FONT=&quot]As explained in the Key Features Document for the PPI, Morgan Stanley & Co. International plc (MSIL) acts as plan manager and custodian for the PPI assets. In this role, MSIL holds the assets of the plan on investors' behalf in safe custody via a third-party nominee, which is Keydata Investment Product Nominees Ltd.

The assets are required to be held in a ring-fenced nominee account (separate from the assets of MSIL and KISL) in accordance with Financial Services Authority regulations and so should not form part of the administration process affecting KISL. [/FONT]
[FONT=&quot]We are currently in discussions with MSIL about how the situation affects the tranche of the PPI that is maturing now, as well as applications that have been submitted for the tranche of the PPI that is currently open for investment. Full details of this will be communicated to relevant clients and their financial advisers as soon as possible. [/FONT]
[FONT=&quot]For clients with holdings in any of the Royal Skandia PPI Life Funds, the position of KISL will not impact their investment because MSIL do not act as Plan Manager or Custodian for the Life Funds' assets.[/FONT]
[FONT=&quot]Morgan Stanley will be writing to all investors in the PPI to update them on the situation once they have further information.[/FONT]

Also, http://www.ft.com/cms/s/2/b57e06ce-54e0-11de-b953-00144feabdc0.html

That has someone with the same initial view that is going around that the market counterparty carries the risk

“Based on our working knowledge of the account management process involved in structured investments we do not believe client’s investments are at risk in the current situation – as it is the solvency of the counterparties that provide the assets that back structured investment Plans that is the critical factor."

News is coming out in dribs and drabs but the fact there are at least three companies looking at buying Keydata within 24 hours of the problem coming to light has to be a good thing.

EdInvestor · 30 June 2009 at 6:04PM

This is looking increasingly nasty - more than £100m of client assets are missing and the Serious Fraud Office has been called in.Sale efforts have fallen through.

http://www.citywire.co.uk/adviser/-/news/other/content.aspx?ID=347390&re=6033&ea=156896&Page=1

Concerned09 · 28 August 2009 at 10:49AM

I invested in a Keydata Secure Income Bond 3 as an ISA. Whereas it appears that most other Keydata investments are "safe", the FSCS appears to be trying to wriggle out of having to cover the 5000-6000 investors who each apparently hold an average of £18,000 in Secure Income Bonds 1, 2 or 3.

Keydata's literature for the ISA said Keydata were authorised and regulated by the FSA: my IFA (who recommended this investment) said that this was the impression that he was under, too. It appears that Keydata invested the money in a Bond issued in Luxemburg, but that there was some major dodgy dealing meaning the money in the bond was siphoned off fraudulently leaving an empty bond.

It seems that the FSA are suggesting that as Keydata has not been declared in default, and as the bond wasn't a UK bond, and as Keydata themselves did not act fraudulently, savers might not be covered by the FSCS.

As only a couple of hundred investors have joined the Keydata victims group I suspect that most of the 5000-6000 people who hold these investments are unaware that they might be about to lose large amounts of their savings - apparently many IFAs haven't told their affected clients of the potential bad news because they hope that everything will work out OK and that these savings WILL be covered by the FSCS.

If you invested in Keydata Secure Income Bonds 1 2 or 3 please add your name and voice to the "victims" group as more people and more pressure might push the FSCS in the right direction. I don't think that Keydata has been mentioned on the main MoneySavingExpert site. Some exposure there of what is going on might also be helpful...

Keydata in administration

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