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FSA predicts Cru to force 200 advisers out of business
by William Robins on Dec 17, 2012 at 12:02
The Financial Services Authority (FSA) has revealed that 110 firms have already cancelled their permissions as a result of Arch Cru sales, and said it expects a further 100 to follow in their wake.
It said it had identified up to 600 firms that advised on the Arch Cru funds, down on the 795 figure it estimated when it consulted on the measures.
It said: ‘An analysis of currently authorised known sellers indicates that around 17% of these firms may potentially breach their regulatory capital requirements as a result of the revised scheme.’
However, this figure does not include 110 firms that have already cancelled their permissions due to Cru. That has led to around 1,800 claims already falling on the Financial Services Compensation Scheme as a result of the collapses.
The FSA said around £90 million in claims relating to Arch Cru had been lodged with the FSCS and that around £30 million of this was likely to be paid. An additional £3 million to £7 million is likely to fall on the FSCS as a result of the redress scheme.
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