§ Sir David SteelTo ask the Chancellor of the Exchequer (1) if he will make a statement on the implications for compensation of investors who have been improperly advised by a firm of its takeover by another; [24752]
(2) what plans he has for compensation to be paid to investors who have been wrongly advised by financial advisers before the coming into force of the Financial Services Act 1986. [24731]
§ Mr. NelsonInvestors who were given advice which breaches the rules of a regulator under the Financial Services Act 1986 once the relevant provisions of the Act came into force and who suffer loss as a result may be entitled to compensation. This compensation comes either from the firm concerned, or from the investors compensation scheme if the firm defaults. In either case, compensation payments are not affected by any takeover.
Compensation for wrong advice given before the Financial Services Act came into force is a private matter between the investor and the firm concerned. The Government do not intend to provide for compensation to be paid in respect of loss suffered as a result of bad advice given before the relevant provision of the Act came into force.