Keydata Investment Services Limited (in administration) ("KIS")

Keydata Investment Services Limited (in administration) ("KIS")

THIS DOCUMENT WAS PRODUCED ON 9 JUNE. IT IS STILL VALID EXCEPT WHERE QUALIFIED BY CAPITALISED SCRIPT. FURTHER QUESTIONS AND ANSWERS NOW SUPPLEMENT THIS DOCUMENT.

Questions and answers - 09/06/09

How do I keep up to date?
The administrators are regularly reviewing matters and will update the website when there is new information to report.

PwC website: www.pwc.co.uk/KIS
Keydata telephone no: 0844 391 3412

What is KIS?
KIS is an investment manager specialising in the design and distribution of structured products for individual investors. It distributed investment products via a marketing network of many thousands of Independent Financial Advisors ("IFAs"). It is a Plan Manager and also provides third party administration services for other financial institutions eg banks, building societies etc. It deals with 85,000 investors and funds of just under £3 billion.

What products did KIS sell?
KIS's invested products include the following:

  • the Annual Kickout Plan (Issue 1)
  • the Capital Protected Bonus Plan (Issue 1)
  • the Defined Income Plan (Issues 1-8)
  • the Dynamic Growth Plan Plus (Issues 1-16)
  • the Extra Income Plan (Issues 1-26)

The following KIS products are currently in their "open period" where investors have subscribed ie. sent in their application forms and cheques and the plan is still open for subscription, but no investment has been made in the underlying securities:

  • the Annual Kickout Plan (Issue 2)
  • the Capital Protected Bonus Plan (Issue 2)
  • the Defined Income Plan (Issue 10)
  • the Dynamic Growth Plan Plus (Issue 17)
  • the Extra Income Plan (Issue 27)

There is one KIS product, the Defined Income Plan (Issue 9), which has closed for subscriptions but the funds are due to be invested in the underlying securities on 19 June 2009.

Key messages

  • PwC administrators have been appointed and will work with the FSA and other bodies to help protect investors' and creditors' interests as well as the company's assets.

  • The administrators' priority is to identify and confirm whether investor funds have been segregated from those of KIS. Based on the limited information they have seen to date they understand this to be the case, however this has to be verified. In the short term, whilst they undertake their investigations, they will not be banking investors' cheques. SUPERSEDED

  • Furthermore, investors will not be able to redeem their investments and/or receive income payments under their respective product plans. SUPERSEDED

  • Investors do not need to take any action at this stage. The administrators will keep KIS's investors updated on progress through various channels including the PwC website at www.pwc.co.uk/KIS and Keydata on 0844 391 3412 and other media.

Why has the Financial Services Authority ("FSA") petitioned for KIS to go into administration?
The FSA has appointed administrators to secure and protect the assets of the company while a full assessment of the company is conducted. The administrators have assumed control of the company.

Are investor monies segregated from the company's assets?
It would be usual for this to be the case and the administrators are currently verifying the position.

What should KIS's investors do now?
Investors do not need to take any action at this stage. The administrators will keep KIS's investors updated on progress through various channels including the PwC website at www.pwc.co.uk/KIS and Keydata on 0844 391 3412 and other media.

The administrators realise this will create uncertainty among investors and the IFA community, but it is vital that the administrators have time to gain a proper assessment of the business whilst the business is stabilised.

What will happen to cheques not yet banked?
If and when the administrators are in a position to resume the banking of cheques, this will be into segregated client accounts.

Is KIS still operating/open to new business?
The appointment of administrators has effectively suspended the company's business. This suspension is so that the administrators can fully assess the situation and act in the best interests of all KIS's investors, creditors and employees whilst the assets are protected. It is the administrators' duty to preserve the value of the business and realise as much as possible for the company's creditors. This may include the disposal of the business as a going concern. THIS IS SUPERSEDED INSOFAR AS PROCESSING OF EXISTING BUSINESS IS NOW CONTINUING AS FAR AS IS PRACTICABLE WITHIN THE CONFINES OF THE ADMINISTRATION

Are these investments covered by the FSCS? Will this trigger compensation payments?
It is too early to confirm if there will be any loss to investors.

When the "strike date" passes, will the above plans be invested as per the application form and issue document? This is currently being considered as part of the administrators' assessment of the business. SUPERSEDED

What is NOT impacted by the administration order?
(a) Venture Capital Trusts

Investors in the following four Venture Capital Trusts ("VCTs") where KIS only acted as the promoter at their launch:

  • Keydata AIM VCT plc
  • Keydata AIM VCT 2 plc
  • Keydata Income VCT1 plc
  • Keydata Income VCT2 plc

The above VCTs are entirely separate publicly quoted legal entities.

(b) Energy High Income Plan and Keydata International

Dan Schwarzmann and Mark Batten were appointed as joint administrators of Keydata Investment Services Limited on 8 June 2009 to manage its affairs, business and property as agents without personal liability. Dan Schwarzmann and Mark Batten are licensed to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales.