Overview

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

Description

The bill has three main sections:

• Compensation for LCF Customers: Authorizes government spending to compensate LCF customers affected by issues detailed in the Gloster Report (an independent investigation into the Financial Conduct Authority's regulation of LCF). This compensation will be managed through the Financial Services Compensation Scheme (FSCS).
• Loans to the Pension Protection Fund (PPF): Amends the Pensions Act 2004 to allow the Secretary of State to lend money to the PPF Board. These loans will support the PPF's fraud compensation functions and will be repaid from the PPF's Fraud Compensation Fund.
• Short Title: Officially names the act as the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Act 2021.

Government Spending

The bill authorizes unspecified expenditure from public funds to compensate LCF customers. Additional government spending will be involved in the loans provided to the PPF, although the exact amount is not specified in the provided bill text.

Groups Affected

• LCF Customers: Customers who lost money due to the issues highlighted in the Gloster Report will receive compensation.
• The Treasury: Responsible for managing the compensation payments to LCF customers.
• The Financial Conduct Authority (FCA): Their regulatory actions (or lack thereof) are subject to scrutiny in the Gloster Report and this bill's actions.
• The Pension Protection Fund (PPF): Receives loans to bolster its fraud compensation capabilities.
• UK Taxpayers: Ultimately bear the cost of the compensation and loans.

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