Why is the Parental Guarantee a secret?

Why is the Parental Guarantee a secret?

See below comments from another thread, on how KSFIOM may have broken banking regulations by not providing details of the parental guarantee in its advertisements, which could be of use to pressuring the FSC and/or PWC to release the parental guarantee - which nobody here it seems has actually seen the details of:

why is the guarantee a secret?

Good point... and the FSC has so far refused to publicly disclose the details of the guarantee, or provide a copy of it, saying to me that it was "for regulatory purposes only" and couldn't be disclosed to the public. I don't really buy this argument myself, and someone somewhere somehow needs to get hold of a copy of it....

Sat, 25/10/2008 - 13:53 GMT — manx-person

This wasn't for regulatory purposes only, it was use to assure customers of the safety of the bank.
Paragraph 61 of the Banking (Regulatory Code) 2005 is in point here

Sat, 25/10/2008 - 13:56 GMT — occams razor

Sorry, am not aware of that particular Code. Can you advise what the relevant part says?

Sat, 25/10/2008 - 13:59 GMT — manx-person

I am sorry I should have posted it

1. Reference to the depositors compensation scheme in advertisements

(1) A bank shall not issue an advertisement which states or implies that any deposits or interest will be guaranteed, secured, insured or the subject of any form of protection (other than that provided by the Banking Business (Compensation of Depositors) Regulations 1991) unless it states:-

(a) the form of the protection;

(b) the extent of the protection; and

(c) the full name of the person who will be liable to meet any claim by the depositor by virtue of the arrangements conferring the protection.

(2) All advertisements issued by a bank which is not a participant in the Depositors Compensation Scheme, as indicated by the schedule to the Banking Business (Compensation of Depositors) Regulations 1991, and which refer to its banking business or contain an invitation to make deposits shall state that the bank is not a participant in the Depositors Compensation Scheme. Such a statement shall appear in a prominent position.

Sat, 25/10/2008 - 14:13 GMT — occams razor

It seems pretty clear to me that on this basis KSFIOM broke all of (a), (b), and (c)

Sat, 25/10/2008 - 14:19 GMT — manx-person

tell me why you think so, and post the email you received and details of where u think it was broken.
If they did you could make a regulatory complaint to the FSC and the financial ombudsmen in the Isle of Man ;-)

Sat, 25/10/2008 - 14:29 GMT — occams razor New

Well, because the KSFIOM brochure said this:

"Not only are all deposits held with Kaupthing Singer and
Friedlander in the Isle of Man covered by the Depositors
Compensation Scheme, all deposits are also fully guaranteed
by our parent Kaupthing hf."

...but did NOT provide any info as to (a), (b), or (c).

See the document named "iom-international-brochurev2.pdf" in the documents package you can download here:


or via the file attached to this post (see below link)

In all of KSFIOM's advertisements and other material I never saw any details that should have been stated in the Code you refer to.

iom-international-brochurev2.pdf797.36 KB
derbyshirebrochure.pdf210.52 KB

parental guarantee

I've been interested in the mysterious parental guarantee for some time now. I think I can understand why the FSC might not be able to reveal its contents but not why the bank itself can't tell us. May be a silly question but has anyone tried to get it from KSFIOM or indeed Aiden Docherty who describes it in his affadavit as a "written undertaking"? Are they also forbidden from revealing its contents?


I have requested it from the lawyers acting for the bank in IOM and PWC (the liquidator). I hav also requested it from the FSC and the lawyers acting for old Kaupthing.

so much for my guarantee about the guarantee!

I said we would have a copy by the end of this week. It is now the end of this week, and all that has in fact happened is that the entity behind one of my 4 possible routes for getting a copy has indeed managed to secure a copy for itself, but is not permitted to show it to us. My other 3 routes have not yet come up with the goods, but one other entity still promises to do so very shortly (voluntarily) and the other 2 entities will need to be coerced more (they evidently do not want to produce a copy).

All I can say on this matter, other than apologising for not having yet secured a copy, is that the fact that one copy has been delivered up to someone means that one will eventually be delivered up to us, but I may have to do more work on it than I had originally anticipated. Separately, I may be able to find out ifthere is anything interested or unexpected about the guarantee without actually having sight of it.

Parental Guarantee transfered from Derbyshire in 2007

I was listening to analysis on the BBC and an interesting comment was made.

Around the world complex financial packages were bundled up and made attractive for buyers. This selling started in first quarter of 2007 then accelerated into 2008.Using this argument it would appear one of these financial bundles was Derbyshire IOm Products.

It was sold on to Kaupthing bank as an attractive investment.It would now appear that this was a con. (just like selling a car that originally was in car a accident to an unsuspecting buyer)

Lawyers are now mobilising themselves against such sellers in the corporate world.

Derbyshire sold on an entity that was supposedly healthy.

-Why sell a heaththy asset?

-Why would they do this?

-Why would they sell an entity that they have had possession of for so long?

-Why sell when subprime mortgage news was just coming out of America ?

Lets hope Derbyshire Isle of Man face tough questioning.


Correspondence in respect of my application for a copy of the guarantee (and other information):

Dear Ms ...,

Thank you for your email. My response, which should be regarded as part of my application for a review of your decision is a follows:

(a) Of:
"1. The guarantee sent to us by KSF(IoM) forms part of the records of that company and the liquidator provisionally is therefore now responsible for this document. Indeed it is possible that he may wish to discuss the terms of the guarantee with Kaupthing Bank hf. It is therefore important that any request concerning the guarantee is directed to the liquidator provisionally – Mr M. Simpson of Michael Simpson of PricewaterhouseCoopers, 60 Circular Road, Douglas, Isle of Man, IM1 1SA."

(i) Please identify the exclusion in the Code of Practice on which you seek to rely in refusing my application in respect of the guarantee;

(ii) the fact that the prov. liquidator may now be "responsible" for the document has no bearing on my application for a copy. The FSC has and continues to have custody, possession and/or control of a copy of that document, and it is the copy held by the FSC that is the subject of my application, not the copy held by the liquidator. Moreover, the liquidator is not, of course, subject to the provisions of the Code.

"2. We had no written communication from the Financial Services Authority in the UK with regard to this matter before 8th October 2008. The Financial Supervision Commission was not advised by the Financial Services Authority about the proposed administration of Kaupthing Singer & Friedlander Ltd (a UK company) until 8th October."

(i) My question concerned all communications about the matter in question during the whole of the week commencing 6 October. However, your answer is restricted to written communications and also to communications up to but not including 8 October 2008. Please reconsider my application under the Code.


We will have a copy of the guarantee by the end of this week. That is not guaranteed, but my promise is probably of more value than the guarantee itself!

At that point, most questions raised about the guarantee should be answerable from the document itself.

3 Nov 2008: EAT my words, see above


elgee..Any progress on getting access to the contents of the mysterious parental guarantee?


I have been working on extracting a copy of this guarantee, with no success, for past 2 weeks. I am waitng for this thread to be concatenated with others dealing with the subject and then I will post my correspondence on the matter.

Parental Guarantee

You may have these already and they may not be of use but:
I have the 3 documents (2 letters and a brochure) sent to existing Derbyshire IOM depositors before and after the time of the take-over of the Derbyshire which highlight "the full security" of deposits after the transfer because of the "full parental guarantee" provided by Kaupthing Bank hf. None provide details of the guarantee.
Are any of these advertisements?

One of the letters, signed by both Derbyshire and KSFIOM, also refers to "Kaupthing Bank Hf having given an irrevocable and binding undertaking to ensure that, while KSFIOM remains its subsidiary, it will at all times be able to discharge its financial obligations as they fall due".

Derbyshire Building Society

I too think the Derbyshire Building Society UK should be held to account for those of us who took out fixed term bonds originally with the Derbyshire IOM (Kaupthing also took on most if not all of their staff I believe) I am still awating a reply to a recorded delivery letter to the CEO, which I am chasing. I will post the reply on here when I eventually get it. Can all of us old Derbyshire customers do this. It is another angle of attack .

Derbyshire to KSF & parental guarantee

I too received these documents, which were crucial in convincing me to accept the transfer of my account from Derbyshire to KSF(IOM).

Can you email me them to me

Can you email me them to me and I will attach them to the post above?
Click on my username then the "Contact" form....
I think I have the Derbyshire brochure (see above link)

Can you copy to me please

When you e-mail docs as requested by occams razor could you kindly send copy to me through my username "Contact" form.
I am ex Derbyshire customer for + 20 years so would like to pursue this with DBS and also worth sending copy to IoM Ombudsman.


Put straw and mud together to make bricks

I would suggest rather than "sending a copy" you would look properly at the process of making a complaint and make the complaint, if founded, properly.
People dont want emails and copies.
They dont want straw and mud
They want bricks.

What is an advertisment undet the Banking Act

An advertisement is referencing back to the definition in the Banking Act 1998 (as amended) and is defined therein as
"“advertisement” includes every form of advertising whether in publication or by
the display of notices or by means of circulars or other documents or by
an exhibition of photographs or cinematograph film or by way of sound
broadcasting, television, telecommunications or any other electronic

Looking to advertising; its purpose is inducement to transact so I think that it could be construed very widely and could include for example emails.

I know some of you want to complain about the directors and management of the Bank. There are a number of avenues for this. There is a complaint to the FSC in its role as regulator; its role as promoter of corporate governance; and there is also a financial ombudsmen in the Isle of Man.

I appreciate that the people of this site want to fire off email immediately, but a well prepared complaint with evidence and supporting reasoning and correctlty addressed could be very effective.

Sending a "half cocked" complaint wont help IMHO

A "cinematograph film" on

  1. A "cinematograph film" on the subject of KSFIOM.... wow that sounds really riveting stuff.

  2. WTF? Cinematographs haven't been used since, like, the 19th century!

  3. Seriously... it seems clear to me that KSFIOM broke these regulations. The question now is is there any way to use this fact. Who do we target and how in order to get a copy of this parental guarantee document based on this information?


Cinematograph is the term that British laws use for movie film, just as they still quaintly cling to 'wireless telegraphy' to describe radio!

The gaurantee..

There is case law over this word; so it would include for example a youtube video would be included.
Occams - where r u based? I maybe have some ideas

Those who lied

Do we have any redress against those who lied?

(That is if they did lie.)

Ie the senior management of KSFIOM who must have known what they were doing - gambling with peoples lives - the very people who had put their trust and sadly their life savings with them.

I was assured every which way by all concerned how I wish i had listened to my own gut!

Well there have to be some

Well there have to be some liars out there, some of it just doesn't tie up.

I think you're missing the

I think you're missing the point. From what we know KSFIOM staff in IOM, including Doherty as per his affidavit on Friday, were unaware of what happened until it actually happened. Anyway, suing individuals is pointless in financial terms, and a red-herring as far as our cause is concerned.

The point is that the banking code requirements state that certain details about the guarantee have to be published by the bank in any advertisements (which I would assume includes a brochure sent to customers and advertised on the website) otherwise they are breaking the banking code.
This information could be used (I know it is still a long shot) in pressuring either KSFIOM, PWC or the FSC to release the parental guarantee.
It may turn out that the parental guarantee contains nothing exciting at all, but I still think it is worth depositors obtaining a copy of it, as no-one has seen it so far, or even been able to confirm its existence (unless you trust the IOM Govt's saying that it exists).

I will

I'll see to the scanning then send, take a little while.


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