AFX admin report reveals wide deficit in client funds

Maria Nikolova

In July, AFX told the FCA it held £7.8 million in client money, whereas in August, the company said there was only £458,697 held in their UK bank accounts.

Jonathan Elman Avery-Gee and Daniel Mark Richardson of CG Recovery Limited, who have been appointed special administrators of AFX Markets, have made public their report and statement of proposals.

There is little positive news for clients of AFX in the report. The document reveals a heavy shortfall in client money.

Information provided by AFX to the Financial Conduct Authority on July 23, 2019, indicated that the company held £7.8 million in client money with 1,025 live customers. On August 12, 2019, the company notified the FCA that there was only £458,697 held in their UK bank accounts. Thus, there is a deficit of more than £7.3 million.

Since their appointment, the administrators have sought the assistance of the directors of AFX but requests for important information to assist the administrators remain outstanding.

Despite attempts to obtain information from CySEC in respect of the funds held in AFX Capital Markets’ account, CySEC has not provided any information in this matter, as they are still carrying out there own investigations. The suspension of the CIF license of AFX Capital Markets remains in place and is not expected to be lifted in the immediate future.

The administrators note that, at present, it is not possible to give precise outcome to clients as the investigations are still ongoing, and the pursuit of the recovery of client money continues.

The administrators have outlined the objectives of the special administration, including:

  • ensuring that client money are returned as soon as practicable;

  • either rescue the company or wind it up in the best interest of creditors;

  • that the administrators realise the remaining assets of the company in pursuit of the objectives of the special administration;

  • that, once the objectives of the special administration have been fulfilled, the administrators seek to conclude the case either: (i) by filing notices that the company no longer holds client assets and dissolving the company without any further recourse to the creditors or clients of the company; or (ii) put forward proposals for a company voluntary arrangement.

A meeting of clients and creditors will be held on November 5, 2019. More information may be found in this Letter.

AFX Markets Limited is a UK registered company that has been authorised by the FCA since May 2012. AFX Markets acted as broker for customers trading on its online trading platforms (ww.afxgroup.com and www.stofs.co.uk), principally in foreign exchange and contracts for difference products. Since the Cypriot regulator CySEC announced the suspension of AFX’s license, AFX’s website has gone black, as FinanceFeeds reported.

Read this next

Market News

Weekly data: Oil and Gold: Price review for the week ahead.

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main market drivers for the near short-term outlook.

Crypto Insider

Octa’s insights: the approval of spot Ethereum ETFs is not going as planned.

The approval of spot Bitcoin exchange-traded funds (ETF) by the U.S. Securities and Exchange Commission (SEC) in January 2024 triggered a substantial rise in the bitcoin price. Also, interest in the proposed spot Ethereum ETF has increased

Industry News

Bursa Malaysia introduces Trading Reminders

The Trading Reminder flag aims to alert investors to exercise caution when encountering a stock displaying persistent unusual price and/or volume movements after the listed company’s UMA response.

Industry News

21 Republican representatives want to “End the Fed”

“Americans are suffering under crippling inflation, and the Federal Reserve is to blame.”

Retail FX

Scope Markets launches unleveraged trading

“Whilst our traditional contract for difference (CFD) products continue to prove incredibly popular, the Invest account is unleveraged and only allows ‘long’ positions to be taken, a combination that significantly reduces the risk of capital losses.”

blockdag

Unlocking Profit Potential: Earn Returns with DecodeEX Experience Bonus!

DecodeEX, the innovative brokerage subsidiary of Decode Global, announced its experience bonus campaign, offering every user the opportunity to maximize their strategic trading potential with up to $10,000 in experience bonus. 

Market News

Pretiorates’ Thoughts 28 – Precious metals and base metals out of control

Ten days ago we mentioned in Pretiorates’ Thoughts 26: Chapter 2 should start with Precious Metals.

Retail FX

Webull launches discount brokerage in Malaysia

“Making investing more inclusive and accessible to all, Webull Malaysia brings best-in-class tools and information to empower investors of all levels with knowledge and skills to help them make better investment decisions and achieve their investment goals.”

Digital Assets

Hidden Road adds OKX’s Nitro Spreads into prime brokerage

“Hidden Road continually seeks to increase market access and capital efficiency through expanded prime brokerage offerings. Integrating OKX’s Nitro Spreads product builds upon this philosophy by extending our counterparties’ ability to execute risk-managed arbitrage strategies.”

<