Overview

This bill aims to compensate customers of London Capital & Finance plc (LCF) who lost money due to fraud, as identified in the Gloster Report. It also allows for loans to the Pension Protection Fund (PPF) to support its fraud compensation efforts.

Description

The bill addresses two key areas:

LCF Compensation

It enables the government to pay compensation to LCF customers affected by the fraud detailed in the Gloster Report (an independent investigation into the Financial Conduct Authority’s regulation of LCF). This compensation will be paid from public funds. The bill modifies the Financial Services and Markets Act 2000 to facilitate this compensation process via the Financial Services Compensation Scheme (FSCS).

Loans to the PPF

The bill amends the Pensions Act 2004 to allow the Secretary of State to lend money to the PPF Board. These loans will fund the PPF's role in compensating victims of fraud within pension schemes. The repayment terms of these loans will be determined by the Secretary of State. The borrowed money will be added to the PPF's Fraud Compensation Fund.

Government Spending

The bill will lead to government expenditure to compensate LCF customers. The exact amount is not specified in the bill itself, but it will utilize money provided by Parliament. Additionally, the government will be lending money to the PPF, though the amount and repayment terms are yet to be determined.

Groups Affected

• LCF customers: Those adversely affected by the fraud at LCF will receive compensation from the government.
• The PPF: Will receive loans to enhance its ability to compensate victims of pension fraud. Their ability to borrow will increase.
• UK Taxpayers: Will ultimately fund the compensation paid to LCF customers.

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