The problem with Keydata…

The Financial Services Compensation Scheme - often described as the lifeboat of the financial services industry - offers investors a life jacket if their savings and investments have been put at risk, but, following the collapse of Keydata, many product providers are questioning the fairness of the regime the scheme operates within.

Clearly many providers signed up to the scheme not anticipating additional levies of the magnitude they are being asked for, and not expecting to be made to pay for misdemeanours of the type linked to Keydata. For asset management companies the tale of Keydata will be a far-too-familiar scenario for a structured products provider, but this is an unfair interpretation of the facts. There is nothing wrong with structured products per se, there are many good providers operating in the market, ranging from investment banks such as Morgan Stanley, Citi and Barclays, to independent packager...