Independent investigation into London Capital & Finance

An independent investigation is taking place into the relevant events relating to the FCA’s regulation of London Capital & Finance (LC&F), between 1 April 2014 and 30 January 2019 following the firm’s failure.

Update 2 June 2020

Dame Elizabeth Gloster wrote to the FCA on 15 May 2020 advising that it would not be possible for her to complete her investigation by the target date of 10 July 2020. Her letter sets out the reasons for the delay and proposes a revised target date for completion of 30 September 2020. Charles Randell, Chair of the FCA, replied on 26 May confirming that the FCA has no objection to the proposed extension and will continue to work with Dame Elizabeth to deliver to this timescale.

Background to the LC&F review

On 30 January 2019, LC&F entered administration following action by the FCA in December 2018 directing LC&F to immediately withdraw its promotional material on the basis that the way the firm was marketing its retail investment products (often referred to as ‘mini-bonds’) was misleading, not fair and unclear.

LC&F issued mini-bonds to 11,625 investors, with a value of £237,207,497. The FCA’s view is that issuing mini-bonds is not normally a regulated activity so that firms issuing mini-bonds do not usually need to be authorised by the FCA. However, when an authorised firm approves a promotion for mini-bonds, they must ensure that it is in line with FCA rules that the financial promotion is fair, clear and not misleading. This means, for example, that risks are required to be appropriately communicated.

On 23 May 2019, following a request from the FCA’s Board, the Economic Secretary to the Treasury directed the FCA to carry out an independent investigation into the circumstances surrounding the collapse of LC&F. At the same time, the Treasury announced its approval of the proposed appointment of Dame Elizabeth Gloster to lead the Investigation. While her appointment was being finalised, Dame Elizabeth signed an agreement, which enabled the FCA to share restricted information and thereby begin work/reading in. Her appointment was formally made on 10 July 2019.

The independent investigation will consider the FCA’s actions, policies and approach when regulating LC&F. Alongside this, the Treasury also announced it would review the wider policy questions raised by the case of LC&F. 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’).

Direction to the Financial Conduct Authority

A detailed Direction initiating the review and setting out its scope and parameters was laid before Parliament by the Treasury on 23 May 2019.

Investigation Protocol

A Protocol setting out the approach to the conduct of the investigation and underlining the nature of the review was published on 25 July 2019.

Dame Elizabeth Gloster’s biography

Dame Elizabeth has had a distinguished career as a barrister and as a judge on the High Court and the Court of Appeal. As well as her current work as an international arbitrator, she has deep experience in commercial law and will bring expertise in financial services, insolvencies and regulation to the role.


To contact the Independent Investigation team, please email [email protected]

This email address will only be accessed by the Independent Reviewer and her independent support team.

For more information see the independent investigation website

Page updates

05/11/2019: Link added Independent investigation website