Firms reach £1.3m split-caps settlement

TWO City firms have now reached a £1.3m agreement with the City watchdog, the Financial Services Authority, over the split capital investment trusts scandal.

Exeter Asset Management was not involved in the deal the FSA agreed on December 24 with 18 firms to resolve its investigation into the selling of split-caps trusts. But Exeter will now pay £1m into the settlement fund.

Stockbroker Teather & Greenwood, which also was not party to last year's agreement, will pay £300,000 to the fund.

The Exeter and Teather contributions are being paid to Fund Distribution Limited (FDL), the company set up to administer payments from the Fund. Exeter acted as a fund manager to a number of financial products but the agreement is expected to have only a limited effect on the amounts availabe for compensation.

Teather acted as a broker, but did not manage any split capital trusts. Its contribution will increase the potential amount available for investors by only a marginal sum.

The FSA has not identified any regulatory breaches and has not imposed any penalties on either of the firms.