At today's (12 October) judgement hearing presided over by judge Kelyn Bacon, an order was handed down that will result in all scheme creditors voting in a single class.
Arguments had been heard by George Bompas KC, who suggested that two classes of investors should be established, as institutional and retail investors have separate and unique options for recourse in the event of the scheme failing.
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However, while Bacon acknowledged this may result in investors approaching their decision with different interests, they would not approach the decision with different legal rights, as payments will be made pari-passu in the event the scheme passes.
She also stated that the groups within the scheme creditors were "not so dissimilar as to be impossible for creditors to consult together as a single class".
Issues regarding process and fairness of the scheme were also raised, however these are to be heard at the sanction hearing in the event the scheme passes, with today's judgement only pertaining to class composition.
Timeline delayed
Today's hearing also resulted in a change to the previously outlined timeline of events, which had planned for all hearings to be concluded before the end of 2023.
However, this has now shifted, with the sanction hearing due to take place on 18 January 2024, in the event the scheme passes.
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The voting date has also moved, with the scheme meeting now set for 13 December.
The new timeline is:
20 October - scheme notice to be sent to investors
4 December - deadline for investors to submit a claim form
13 December - scheme meeting, including vote
18 January - sanction court hearing
Fairness and process
Concerns have been raised across the two days by Bompas, scheme creditor George Dickinson and members of the Transparency Task Force, Alan Pyatt, Andy Agathangelou and Mark Bishop, relating to the transparency and fairness of the scheme, along with the effectiveness of communication.
While Bacon heard these points, she explained that these were issues to be dealt with at the sanction hearing, in the event the scheme passes.
As such, although investors will know the outcome of the vote before the end of 2023, the scheme will not become effective unless it is approved on 18 January, an event that is not guaranteed.
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However, Bacon did suggest that the Financial Conduct Authority should encourage platforms to improve their communications with end investors, in order to ensure as many as possible are aware of the scheme and cast their votes with full information and time to digest it.
It was also suggested the regulator should consider whether it is able to publish more detailed information regarding its draft warning notice, so investors have a clearer picture of the scope and weight of its investigation.
The FCA has already clarified that the draft warning notice cannot be published due to statutory confidentiality, and any additional information would likely be heavily redacted.
The terms of the scheme also prevents the regulator from publishing its final notice, as this is dependent on the outcome of the vote.
Multi-manager funds
Bishop asked whether investors who had held the fund indirectly, via investment in funds-of-funds, would be given a pass-through vote relating to the scheme, particularly raising Hargreaves Lansdown's range of multi-manager funds as an example.
Investment Week understands that the fund management company responsible for HL's multi-manager range will take a decision on behalf of investors, acting in their best interests and in line with its legal and regulatory obligations, following the publication of the scheme documents.
Investment Week also understands that investors who held the former WEIF via the HL platform will be required to place their votes directly with Link Fund Solutions via an online portal, rather than a decision being taken en masse.