Keydata concerns?
Posted June 11th, 2009
Detailed below is Whitechurch Securities view on Keydata going into Administration.
“We were taken by surprise when we heard the news yesterday that Keydata Investment Services have gone into administration. However, after digesting the news, here is our understanding of the situation as it stands at the moment.
In all likelihood, we envisage that the administration of the products that Keydata were involved in will be moved on to another, or other, administrative companies. This means that the products themselves will continue as planned but that there may be delays in either income or maturity payments.
It is important to note that Keydata acted as providers or as administrators on structured products usually on the behalf of other third parties. They were not involved in the actual investment side of the products – this action would have been carried out by a market counterparty, e.g. HSBC. As such, any investment monies held with Keydata for market counterparty use should be held in ring-fenced accounts under a separate legal entity and not in Keydata’s own business account. Where Keydata have acted on the behalf of third parties, investment monies will be the responsibility of the third party and not Keydata.
Therefore, as any investment monies will be held in either a separate nominee company or with a third party, it is our understanding that investors will incur no financial loss due to the insolvency of Keydata Investment Services.
In the meantime, we will continue to scrutinise events and will provide you any further updates appropriately.”
Ben Willis
Head of Research
09/06/09
If you would like advice or guidance on any of the issues raised, please call 01204 663904 or email advice@themedicalifa.co.uk
