Split talks hang in the balance

SPLIT capital funds have told the Financial Services Authority that they are willing to offer compensation of £100m for investors' losses - if the watchdog makes concessions. But such is the gulf between the two sides that talks could easily break down.

That leaves the outcome of FSA chief executive John Tiner's grandstanding March 2 initiative still uncertain. He set a March 16 deadline for 21 issuers of splits to cough up or face the FSA's fury. That is long past.

One firm said: 'Everybody agrees the FSA's evidence is weak.' But it has extensive powers and has already frozen some funds at one firm, Exeter.

The watchdog has backed down on some issues, but the biggest gulf is money. Compensating ordinary investors in splits could cost nearly £1bn. The FSA might do a deal at around £500m, with the larger of the 21 firms bearing the brunt.