Not upheld: failure to notify of corporate action and bond maturity extension complaint against Embark Investment Services Limited trading as Stocktrade

Decision detail

Summary

Mr C complained that Embark failed to notify him of a corporate debt restructure and consent solicitation affecting his bond holding, did not inform him of the maturity date extension to June 2027, and prevented him from electing for the consent solicitation fee. Embark stated it had not received any corporate action notification through its standard channels and that its terms disclosed it would not be responsible for corporate actions it was not informed of. The ombudsman found that although Mr C's bond was eligible for the consent solicitation, Embark and its third-party provider had not received notification from Euroclear, suggesting the issue occurred outside Embark's control. The ombudsman upheld Embark's position that it had fairly applied its terms and was not obligated to act on Mr C's provision of the public LSE notice. The bond maturity extension was the issuer's decision and not Embark's responsibility. The ombudsman found the £100 already paid for communication delays to be fair and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Embark had fairly applied its terms and conditions, which disclosed that corporate actions may not always be communicated if not received through standard channels. Although Mr C's bond was eligible for the consent solicitation, Embark and its third-party provider had not received any corporate action notification from Euroclear, suggesting the issue occurred earlier in the communication chain outside Embark's control. The ombudsman considered it reasonable for Embark to rely on standardised formal channels rather than act on Mr C's provision of the public LSE notice. The bond maturity extension was the issuer's decision resulting from the restructuring vote and was not Embark's responsibility. The ombudsman found the £100 compensation for communication delays to be fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website