Economic Secretary sets out detail of HMT reviews of “mini-bonds”

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On 23 May, the Economic Secretary to the Treasury, John Glen, directed the Financial Conduct Authority (FCA) to begin an investigation into the circumstances surrounding the collapse of London Capital & Finance (LCF) and the FCA’s supervision of the firm. Dame Elizabeth Gloster was appointed to conduct this investigation.

Alongside this, HM Treasury also announced it would review the wider policy questions raised by the case of LCF. These relate to the regulatory and tax treatment of the kinds of retail investment products issued by London Capital and Finance (often referred to as “mini-bonds”).

Plans for these reviews are now more developed, and the Economic Secretary to the Treasury has therefore written to the Treasury Select Committee to provide an update on the two strands of work HM Treasury will undertake, collaborating with the FCA and HM Revenue and Customs as appropriate. These consist of a review of policy on non-transferable debt securities, and an assessment of the Innovative Finance ISA rules.

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