The Financial Conduct Authority (FCA), previously the Financial Services Authority (FSA) has created a set of questions and answers to determine whether a customer who was sold an interest rate swap product qualifies as “non-sophisticated” and therefore eligible to make an interest rate swap claim.
Please Note: If you feel that you fall within some of the questions, please do not hesitate to contact Maple Leaf Financial for a No Obligation chat.
Do I Qualify as “non-sophisticated”
Did the customer purchase a derivative (separate from a loan) that had the function of protecting against interest rate fluctuations? There are two requirements here :
1) the derivative must have been a separate product and
2) it must have been used to hedge interest rates.
If the answer is “No,” then the product cannot be reviewed by the FCA.
If the answer is “Yes,” then the person can continue to the Second Question.
Was the Interest Rate Hedging Product (IRHP) sold on or after 1 December 2001?
Continue to Third Question.
This question has two branches, one for a “private customer” and one for a “retail client”.
+ Was the buyer a “private customer” purchasing the derivative on or before 31 October 2007?
+ Was the buyer a “retail client” purchasing the derivative on or after November 1, 2007?
– Yes to either question, then continue to Fourth Question.
Fourth Question is “Sophistication Test”
Did the customer have the requisite knowledge and sophistication to understand the risk of the derivative?
There is also a disclaimer suggesting that if the party does not qualify, he or she could seek legal representation.
Continue to Fifth Question.
Three thresholds (or criteria) are listed for a small group or company:
1) Turnover of more than £6.5 million net
2) Balance sheet total of more than £3.26 million
3) More than 50 employees
Does the customer meet at least the first criteria and the second or third criteria?
Continue to Sixth Question.
Is customer part of a group of Connected Clients [single risk classification] with an aggregate notional value of the IRHP as more than £10 million?
This customer qualifies as non-sophisticated and has a case that can be reviewed by the FCA.
Maple Financial Interest Rate Swap Claims
We have a specialist team of solicitors dedicated to dealing with the mis-selling of interest rate swap protection products by the banks. We are very happy to review these relatively complex arrangements and to claim compensation for our clients where appropriate.
If you believe you have incorrectly been classified as a ‘sophisticated’ customer and have, therefore, not been eligible for redress. Maple Leaf Financial will review your interest rate product and we will be happy to discuss your individual concerns and requirements : 0800 7747624
We have also provided the flowchart provided by the FCA for you to follow.
Interest Rate Swap – “non-sophisticated” customer
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