LONDON (Reuters) - Britain’s finance ministry said on Thursday that former judge Elizabeth Gloster will lead an investigation into the collapse of investment firm London Capital & Finance (LCF) and how it was supervised by the Financial Conduct Authority (FCA).

LCF went into administration in January with losses of up to 237 million pounds from mini-bond investments. While LCF itself was regulated by the FCA, the mini-bonds, used to raise funds for small businesses, are not regulated.

The ministry said in a statement it was also undertaking a wider policy review of the regulatory regime for “mini-bonds” and similar types of securities.

The ministry had said in April it was ordering the FCA to commission an independent review into LCF, and Thursday’s announcement confirms its launch and who will lead it.

Gloster will report her findings to the ministry within 12 months.

“We urgently need to get to the bottom of the circumstances around the collapse of LCF,” financial services minister John Glen said in a statement.

An investigation into the inner workings of the watchdog comes at a sensitive time for FCA Chief Executive Andrew Bailey, who is seen as the most likely successor to Mark Carney as Bank of England governor from early 2020.

FCA Chair Charles Randell said on Thursday the investigation would establish what happened at LCF and whether further changes were needed.

“It will support the broader review of mini-bond regulation,” Randell said.

Nicky Morgan, chair of parliament’s Treasury Select Committee, said investors will want answers urgently and they may be surprised by the 12-month deadline for the investigation to conclude.

“This cannot be kicked into the long grass. The FCA, HM Treasury and Dame Elizabeth must think innovatively about how the investigation can report quickly,” Morgan said.

John McDonnell, the opposition Labour party’s finance chief, said 12 months was far too long for people whose lives have been “torn apart” by the collapse of LCF.

Smith & Williamson, the appointed administrator for LCF, has said that 11,500 bondholders are unlikely to get more than 20 percent of their 237 million pound investment back.

Gloster’s review will be separate from a Serious Fraud Office investigation into individuals associated with LCF, which could affect when her report can be published.

Morgan said that with the SFO also investigating events surrounding LCF, “innovative solutions will also be needed to ensure that there is maximum transparency.”

($1 = 0.7913 pounds)