Troubled life settlement fund ARM Asset Backed Securities has moved a step closer to challenging the Financial Services Authority (FSA) over a freeze on assets that were due to be invested in the fund.
ARM said in an update to the market that after a 10-month wait it had now received legal opinion from a Luxembourg lawyer on the freezing order. That followed its enlisting of an English QC, whose opinion gave rise to questions about the law in Luxembourg, where the fund is domiciled.
'We are now confident that the elusive conclusion to this saga of a final legal opinion is in sight,' said ARM in a statement. It said it was now expecting the English QC to complete his opinion. Barring a clash between the two opinions, it said it would use both opinions 'to press the FSA to release the freezing order over the funds'.
The freezing order relates to money intended to be invested in tranches nine to 11 of the ARM fund. However the bonds in those tranches were not issued as ARM failed to gain authorisation from the Luxembourg regulator.
The FSA has said it imposed the order until a decision over the legal ownership of the money was reached. It said in a note on its website for ARM investors: 'ARM announced that it now has a Luxembourg legal opinion supporting its view that the money is ARM's. We have not been given sight of this legal opinion, and so we cannot take a view on whether it would change our stance on the pending investor money.'
Around 2,000 UK investors placed money in the ARM fund, including approximately 800 clients of troubled former IFA Rockingham Retirement.
ARM has been caught in regulatory limbo since November 2009, when it was blocked from issuing new bonds.