The FSA today says it is acting in the best interests of consumers following stinging criticism over its declaration Keydata Investment Solutions was insolvent.
A spokesperson says the regulator would not have called in administrators unless it believed it "the best course of action" for investors, adding the firm has not contested its decision.
Earlier today the troubled structured products provider accused the FSA of failing to adequately explore "other routes out" for the company.
Commentators have also expressed their shock and surprise at the suddenness of the FSA's actions.
Yesterday, the regulator announced Keydata, a third-party plan manager with £2.8bn assets under management, was being placed in administration "on the grounds it is insolvent".
A spokesperson today told IFAonline: "This is not a decision we have taken lightly and we have done it in the best interests of investors. We would not have done this if we didn't think it was the best course of action for consumers."
The FSA would not disclose when it began investigating Keydata's accounts.
Earlier, a source close to Keydata said it did not agree with the FSA's decision and believes it has failed to act in the best interests of the 85,000 consumers affected.
It says it offered the FSA another option rather than to be declared insolvent but this was rejected as the regulator argued the firm was unable to meet its liabilities.
"If the FSA hadn't taken this action then there wouldn't be this uncertainty for consumers and the FSCS would not have to be involved," according to the source.
Keydata does not believe investors will lose money as a result of the insolvency and PwC has also said there is "no early suggestion people will necessarily lose money".
However, the PwC spokeswoman says the process may not be quick, adding it could take "anything between two weeks and 10 years" to complete.
Dan Schwarzmann, joint administrator and partner at PWC, says: "Our focus is the consumers."
Investors, IFAs and other interested parties can contact 020 7804 4424 (PWC) for more information.IFAonline
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