Crown guarantee may not cover investments in wraps
The crux of the matter is whether OneAnswer is a bare trust, where providers of trustee and nominee services hold funds on behalf of other people and have no discretion over the investment of the securities and no beneficial interest in them, according to the Treasury website. The trusts are covered by the guarantee, provided that the bare trustee can demonstrate that the beneficiary of the bare trust would have been an eligible retail investor if they had held the debt security personally.
In an update, ING told advisers the government department could not confirm in advance that claims will be accepted under the deed of guarantee, and that any claims would have to be tested on their individual merits.
"We recognise that this level of uncertainty is far from satisfactory, however we wanted to communicate this with you as a matter of priority," the adviser update said. "In the light of this uncertainty, advisers are encouraged to review their client arrangements."
A Treasury spokesman told Good Returns OneAnswer's arrangements were complicated and the department is working through the matter and expects to be able to offer some guidance in the next couple of days.
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