NDFA and DRL were involved in selling structured products, as well as ISA mortgage products and insurance plans, to retail investors. NDFA also distributed to investors. The firms distributed these products directly to their customers and also through Independent Financial Advisers (IFAs). They dealt with approximately 35,000 UK investors.

On 14 October 2009 it was announced that NDFA and DRL had gone into administration. Andrew Hosking and Martin Ellis of Grant Thornton UK LLP have been appointed as their joint administrators. They will take over the running of the companies with a view to achieving a better result for the companies’ creditors, including investors, than would be likely if the firms were wound up.

The firms’ administration will affect investors in NDFA’s and DRL’s products in different ways, as they sold a number of different products.

Some of the structured products sold by these firms in 2008 were backed by firms in the Lehman Brothers Group. The marketing and distribution of these products, along with the wider structured products market, have been subject to an FSA review. Full details of this review will be published at the end of October 2009.

Any customers who have bought Lehman Brothers-backed structured products or other investments through NDFA or DRL.

The firms’ administrators will write to all investors with more information within the next seven days, which will be followed by a more detailed letter within 28 days advising you of the various options that are available to you.

They have also set up a dedicated helpline (0844 770 2203) and website which will provide updates when there is new information to report.

A list of all products sold by NDFA and DRL, both non-Lehman- and Lehman-backed, are available on the administrators' website.

You do not need to do anything in the short term. The administrators will write to all investors with more information shortly.

Will I get my money back?
As these firms are now in administration, we have determined the firms to be ‘in default’ for the purposes of the Financial Services Compensation Scheme (FSCS).

On the basis of information provided by us, the FSCS has begun looking into products which were backed by Lehman Brothers. Its initial findings are that at least some of the marketing materials used by the firms do not comply with their regulatory obligations and may give rise to valid claims. The FSCS will assess whether it will pay compensation, depending on the facts of each case.

When will I get my money back?
The FSCS expects to process the majority of claims within six months of receiving them. If it becomes apparent that it will not be able to deal with a claim within this timescale, it will let claimants know.

What will happen to the complaint I have lodged with the Financial Ombudsman Service (Ombudsman) against NDFA or DRL?
Complaints that were being considered by the Ombudsman at the time that NDFA and DRL went into administration will be transferred to and considered by the FSCS. The Ombudsman will write to you to confirm that your case has been transferred to the FSCS.

What should I do if I have not complained but want to do so?
The firms’ administrator will write to you shortly advising you of the various options that are available to you.

What if I have a Lehman-backed structured product produced by another firm?
You are not affected by the administration of these firms.

Do I need to do anything?
You don’t need to take any steps now. The firms’ administrator will write to all investors within the next seven days, which will be followed by a more detailed letter within 28 days advising you of the various options that are available to you.

Just because these firms have gone into administration does not mean your product has been affected.

It is the administrators' responsibility to check the firms’ books – this could result in some delay in making income payments or repayment of capital on maturing investment products in the short term.

It may not be in your best interest to cancel one of the investment products early, as you might get back significantly less than you invested. Similarly, it may not be in your best interest to cancel any direct debits relating to regular instalment plans as this may result in losing any insurance cover included in the plans. You should take professional advice if you are considering either of those courses of action.

News articles on this website are accurate, to the best of our knowledge, only at the date of publication. If the information they contain changes, follow-up articles may be published.