The Malta Financial Services Authority would like to provide a further update to investors who hold an investment in ARM Asset Backed Securities S.A. (‘ARM’) following its media statement of 17th January 2014.
Over the past few months the Authority has been in continuous discussions with the UK Financial Services Compensation Scheme (‘FSCS’) in order to determine whether Maltese investors in ARM securities can make claims against Catalyst Investment Group Limited. In its media statement of 9th January 2014, the Authority announced that the FSCS was considering whether Catalyst, a company (now in liquidation) in the UK and which was the promoter for ARM in the UK and Malta, could be liable for some losses sustained by investors in ARM.
In this regard, certain information which appeared in certain sections of the press yesterday 19th February 2014 is incorrect. The general public should note that the FSCS determined that Maltese investors who hold securities issued by ARM (tranches 1 to 11) will be treated in the same way as UK investors. However, it is not certain whether each and every investor will be given compensation. All claims will be considered on a case-by-case basis. Furthermore, the maximum compensation that an investor can receive amounts to GBP50,000.
The Authority would also like to provide clarifications regarding the ad hoc committee being set up by BDO UK, the provisional liquidators of ARM Asset Backed Securities S.A. This is a completely separate and different process from the one being undertaken by the FSCS.
During the meeting of 3rd February 2014 held by BDO, investors had to vote to elect members to sit on the ad-hoc committee of ARM investors.
The provisional liquidators have determined that the committee would be composed of four bondholders as well as the UK’s Financial Services Compensation Scheme [‘FSCS’] and the Malta Financial Services Authority on an ex officio basis. The MFSA has agreed to perform this role in the exclusive interest of the Maltese investors.
The role of the ad-hoc committee would be to act as the representative body of Bondholders with which the Provisional Liquidator would consult at regular intervals. Information of a non-public, confidential nature and price sensitive nature will be provided to the members of the ad-hoc committee. This ad-hoc committee will have no executive powers. Therefore, if the provisional liquidators, after having obtained feedback from the ad hoc committee, decide, for example, to propose a restructuring process a vote on this proposal will need to be taken by all the bondholders.
The Authority would like to stress the fact that it has been working on the above for various months and is still in continuous discussions with both the FSCS and BDO UK. The Authority is doing its utmost to keep the investors updated.
