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Kaupthing Singer and Friedlander

Volume 488: debated on Monday 2 March 2009

To ask the Chancellor of the Exchequer who regulates Kaupthing Singer and Friedlander’s (KSF’s) activities in the UK; what steps (a) the Government and (b) other regulatory bodies have taken in relation to KSF assets in the last six months; what those assets were valued at (i) 1 September 2008 and (ii) the latest date for which figures are available; what compensation arrangements apply to (A) individuals, (B) local authorities and (C) other public bodies who have lost funds deposited in KSF; and what the relationship is between KSF and KSF Isle of Man. (250361)

Kaupthing Singer and Friedlander Ltd. (KSF), a UK subsidiary of Kaupthing Bank hf, is incorporated under English law and regulated by the FSA.

On 8 October 2008, the FSA concluded that Kaupthing Singer and Friedlander Ltd. no longer met threshold conditions and was in default for the purposes of the Financial Services Compensation Scheme (FSCS). The Treasury, using an order under the Banking (Special Provisions) Act 2008, transferred KSF’s deposit book of “Kaupthing Edge” accounts to ING Direct. The Government also committed to paying out in full FSCS eligible depositors whose accounts were not transferred.

The remainder of KSF’s business was subsequently placed into administration following due legal process. The administrators are responsible for managing the remainder of KSF’s business and loan book to maximise recovery for creditors. The administrators will continue to deal with the assets in compliance with insolvency law and the provisions of the transfer order (including those provisions of the transfer order which confer certain limited functions on the Treasury in relation to the assets of KSF). Those depositors that are ineligible for FSCS compensation will be creditors of the bank in the normal way and paid out in accordance with UK insolvency procedures.

Kaupthing Singer and Friedlander (Isle of Man) (KSF IoM) is not a subsidiary of KSF in the UK, but of the Icelandic parent company.