FSA admits to delay in split-cap payouts

The body set up to distribute nearly £150m in compensation to split-capital investment trust investors has fallen behind schedule.

The body set up to distribute nearly £150m in compensation to split-capital investment trust investors has fallen behind schedule.

The regulator had promised that investors would, by the end of March, be sent details of how people should claim compensation for one class of splits - called zero dividend preference shares - and, crucially, the deadline for making a request.

But the Financial Services Authority on Friday said that due to the complex nature of the information required, this self-imposed deadline had been pushed back by a few weeks.

"The process and rules governing the distribution are fairly complex. We only have one opportunity to get this right, and it is taking longer than anticipated," said a spokesman. "All the money will be distributed by the company by the end of December as planned."

The company, Fund Distribution Ltd (FDL), was set up at the end of last year after the regulator reached a settlement worth £194m with 18 firms at the heart of the so-called "magic circle" of splits. Investors lost an estimated £677m out of the £785m they invested in zeros, and other investors in split capital trusts lost many times that.

Nearly £50m of this settlement is being distributed separately to FDL by Aberdeen Unit Trust Managers as part of its Capital Uplift programme to recompense splits investors in its collapsed Aberdeen Progressive Growth fund. FDL, which is using a separate company, Claims Management Group, to process the work, was this weekend still saying on its website that the information would be sent in the first quarter. It was unavailable to comment further.

Investors are unhappy at the delay. Jon Vickers, whose family were major investors in the St David's investment trust, also run by Aberdeen, said: "I feel fed up that the information has not been sent out. We have been victims of the magic circle and do not even know yet the criteria for distribution."