At least 25 mini-bond issuers collapsed since 2018, FCA data shows

By Jean-Baptiste Andrieux

At least 25 firms issuing mini-bonds have collapsed since 2018 according to data from the Financial Conduct Authority.

This is what a Freedom of Information request submitted to the FCA by Money Marketing reveals.

Yet, the FCA does not routinely collect data from firms on their issuing of mini-bonds as it is not a regulated activity.

As a result, the total number of mini-bond issuers that entered liquidation could be higher.

The regulator also specified that those firms may have gone into administration for reasons unrelated to their activities in the mini-bond market.

The FCA said: “It is important to note that a firm that has gone into administration/liquidation may not have done so as a direct result of them being involved in the distribution of mini-bonds, there are many other factors, like the global pandemic, that could have been why a firm has failed.”

Year Number of collapsed mini-bond issuers
2018 3
2019 7
2020 10
2021 5

The regulator was not able to tell how much the collapse of mini-bond issuers have cost investors in total.

This is because the FCA does not regularly collect data from this type of firm.

Money Marketing also asked the FCA how much the collapse of mini-bond issuers has cost to the regulator over the last five years.

Unfortunately it was unable to provide an answer.

The FCA said: “We do not hold the information in the way you have requested for the last five years as this forms part of the business as usual activities across a number of business areas throughout the organisation.”

The Financial Services Compensation Scheme has begun offering compensation to London Capital and Finance bondholders eligible under the government’s scheme.

In an update, the organisation said it had sent out letters to around 1,000 bondholders last week (beginning 22 November).

The letters will include details on what they need to do to accept the offer. It will also provide explanations for payment terms and some calculation examples.

The FSCS said it would contact everyone “as soon as possible”.

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