Morses Club Limited

Limits on the record

• Temporary hold on the processing of complaints

  Requirement 1 - The Firm shall continue to process (and pay, in full, if upheld) all customer complaints received prior to the commencement of the Complaints Processing Pause whether made directly (i) to the Firm or (ii) to the Financial Ombudsmen Service, in the usual way (i.e. in accordance with the relevant rules set out in DISP). Requirement 2 - (ring-fencing of funds in an escrow account for certain customers) The Firm must put in place as soon as practicable (and in any within 10 business days of this letter) legally binding arrangements to protect the interests of certain customers of the Firm in accordance with the following principles: a. the customers to be protected are those customers who: (i) make a complaint to the Firm in the period at any time after the Complaints Processing Pause comes into effect (the “Start Date”); and (ii) make any payment to the Firm in respect of their loans (principal, interest, fees or other) in the period after the Start Date, in each case until the earlier of either the effective date of the proposed scheme of arrangement (the “Scheme”) or the date that the Firm enters administration or liquidation (the “Affected Customers”); b. all payments made by Affected Customers to the Firm after the Start Date are to be ring-fenced in order that such monies will be available, on a priority basis, to meet any redress claim that an Affected Customer is subsequently found to have (either under the Scheme or in the event that the Scheme fails and/or the Firm enters administration or liquidation, as the case may be) in circumstances where an Affected Customer’s redress claim exceeds the balance of loan liabilities he/she owes at the time redress is to be made (i.e. after setting off the amount of the redress claim against the loan liabilities, a balance is left owing by the Firm to an Affected Customer); c. if a Scheme becomes effective, any amount payable to Affected Customers in excess of the amount of the monies in the Trust Account (as defined below), would be payable to Affected Customers under the terms of the Scheme; d. if and to the extent that the monies in the Trust Account exceed the amount that is due to Affected Customers, the Scheme must provide for those monies to be added to the monies available in the Scheme to pay the other schemed creditors i.e. any surplus would be added to the general Scheme fund; e. the above-mentioned ring-fencing must take the form of a legally binding trust so that the arrangements are effective notwithstanding the Firm entering administration or another formal insolvency procedure (if a Scheme does not first become effective). The FCA anticipates in this regard that the Firm will be the trustee and it will pay the relevant monies into a designated trust account held in its name (the “Trust Account”), with appropriate measures put in place to ensure that the monies credited to that account are not commingled with other monies of the Firm and are used only for the designated purposes outlined above; and f. the Firm will be responsible for ensuring that it obtains any third-party consents that it needs in connection with these arrangements (including but not limited to the Firm’s secured creditors and the bank with which the designated account is held). The Firm must provide the FCA with a copy of the execution versions of the key documents as soon as practicable after they have been signed.