Call for law change as CHC compensation to take two more years
Legislation is needed to limit how long investors are left out of pocket when a regulated investment firm fails, according to the Investor Compensation Company (ICC).
The ICC was established to compensate eligible investors when an investment firm that had been regulated goes bust. Its most high-profile case has been dealing with the aftermath of the collapse of Custom House Capital (CHC) almost seven years ago. Most of the 2,000 investors affected have yet to receive compensation. It could be two more years before payments are finalised to all the victims, ICC said in its latest annual report.
The ICC has paid out aggregate compensation of €7.4m to CHC investors, out of an estimated final bill of €19.7m. In the 12 months to the end of last July just eight CHC claims were validated; due to the complexity of the liquidation of CHC, ICC said. The rescue fund cannot make a payout until each investor claim is validated by CHC liquidator Kieran Wallace.
Legislation to protect investors does not include a deadline by which claims must be certified by an administrator, ICC said. It has lobbied for the law to be changed.
"It is clear that in the absence of appropriate legislative and other change, it is probable that investors caught up in an investment firm failure of similar complexity in the future could be required to endure the long delays that have been borne by many CHC clients," the report noted.