Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he is taking to (a) compensate London Capital and Finance bondholders and (b) reform Financial Conduct Authority regulation to prevent future regulatory failure.

In my Written Ministerial Statement on 17 December 2020, I outlined the 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.

My statement also announced 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.

As my statement also sets out, the Government welcomes the FCA’s commitment to implement all of Dame Elizabeth Gloster’s recommendations. The FCA’s response to the report details the changes it has made over several years and commits to accelerating this ongoing programme of reform through its Transformation Programme.

The FCA will report publicly on the progress of its Transformation Programme until such time as the recommendations from both reviews have been substantially implemented, as set out in the FCA CEO’s letter to me on 17 December 2020 which is available on gov.uk.