More than 80,000 investors will be unable to redeem their policies with structured product provider Keydata Investment Services, until administrator PriceWaterhouseCoopers (PWC) has assessed the company's position.
Keydata, which had assets of £2.8 billion at the end of April, was placed into administration on Monday by the Financial Services Authority (FSA) on the grounds that it is insolvent.
Dan Schwarzmann, partner at PWC, said that from information seen so far, customers' funds have been held in secure custody accounts. However, there are a number of Keydata products which may not comply with individual savings accounts (Isa) regulations. "Tax liabilities arising due to the non-compliance issues associated with these products is one of the factors which has led to the FSA's actions," he says.
Keydata also provides third party administration for other financial institutions' structured product plans, including boutique investment firm Blue Sky Management, HSBC, Yorkshire Building Society and Leeds Building Society.
Suzette Browne, senior communications officer for The Financial Services Compensation Scheme (FSCS) confirmed that the FSCS was working with the FSA and PWC to determine their involvement. "If it does become clear that customers have suffered a financial loss as a direct consequence of their dealings with the firm, and Keydata is unable to pay claims, then we may consider paying claims - but it is still too early to say."
■ PWC has set up a dedicated website, www.pwc.co.uk/KIS, and a helpline (020 7804 4424) for investors, independent financial advisers (IFAs) and other interested parties.
