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.