FSCS expects investment intermediation recoveries of £27m in 2017/18

Maria Nikolova

Due to continued claims in this sector, FSCS adjusts its forecast costs for the year, raising the levy to £88m.

The UK Financial Services Compensation Scheme (FSCS) has published its final levies for 2017/18, increasing the levy for the investment intermediation sector by £4 million to £88 million.

In its detailed outlook, FSCS notes that the adjustment of the costs forecast for the investment intermediation sector reflects the fact that it continues to see claims in this sector. These costs relate to a variety of different claims, FSCS explains. Last year, it made a refund of £50 million to firms in this class. However, because of the historic volatility in this sector, it was decided to raise the levy on the three-year forecast model to adjust for future unexpected failures and costs.

FSCS is forecasting £27 million recoveries on this class in 2017/18. It expects the main sources to be Alpari UK and ARM (Catalyst).

In February this year, the Joint Special Administrators (JSAs) from KPMG published their 4th Progress Report, covering their work on the Alpari UK Limited case from July 19, 2016 to January 18, 2017.

The report says the Financial Services Compensation Scheme (FSCS) has taken assignment of 12,759 claims filed by ex-Alpari UK clients and has paid compensation of USD 50.8 million to 12,305 former clients of the now defunct retail FX broker.

A final distribution from the Client Money Pool (CMP) is expected before July 24, 2017. The JSAs say 16,278 clients have agreed their claim representing 96.2% by value of clients with a claim into the CMP.

The administrators have paid a total of approximately USD 51.8 million from the CMP in respect of 12,503 clients, representing approximately 53% of the CMP.

At the moment of publication of the report, the administrators estimated that the overall return to clients will be in the range of 78.3 cents to 79.7 cents in the $ (USD).

FSCS will levy firms £363 million in 2017/18, according to data published today. The sum is £15 million smaller than the one forecast in its Plan and Budget 2017/18 released in January this year.

Read this next

Retail FX

Italian watchdog red flags Olympus Brokers, UnicoFX and Allfina Group

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

XTB revenues hits zł1.45 billion in 2022, Q4 earnings disappoint

Poland-based Forex and CFDs broker, XTB has reported its final results for Q4 of 2022 and the full fiscal year ending on December 31, 2022, showing one of its most successful corporate years.

Executive Moves

Lirunex Limited recruits Waleed Salah as head of MENA sales

Maldives-based brokerage firm Lirunex Limited has secured the services of Waleed Salah, who joined the company in the role of its head of sales for the MENA region.

Executive Moves

Trading 212 parts ways with co-founder Borislav Nedialkov

Trading 212 has a void to fill at its FCA-regulated business in London, following the departure of two key players, Raj Somal and Borislav Nedialkov.

Digital Assets

Binance acquires troubled crypto exchange GOPAX

Binance, the world’s largest digital asset trading platform, has reportedly acquired a majority stake in the troubled South Korea-based cryptocurrency exchange GOPAX.

Digital Assets

Kraken exits Middle East, closes UAE office

Digital currency exchange Kraken will close down its operations in Abu Dhabi, UAE and lay off the majority of its team focused on the Middle East and North Africa.

Industry News

CFTC comments on ION Cleared Derivatives issues after Russian-linked hack

“The ongoing issue is impacting some clearing members’ ability to provide the CFTC with timely and accurate data. As this incident unfolded, it became clear that the submission of data that is required by registrants will be delayed until the trading issues are resolved.”

Industry News

FCA took down 14 times more misleading ads in 2022 thanks to technology

The FCA has made significant improvements to the digital tools it uses to find problem firms and misleading adverts. These improvements have enabled it to work through a much larger number of cases compared with 2021.

Executive Moves

HKEX appoints ex-Goldman Sachs Matthew Cheong to lead platform’s focus on derivatives

“He has worked for a number of the world’s leading investment banks and his experience will be invaluable to HKEX as we continue to enhance our derivatives product offerings and build on our innovative and robust platform business, connecting capital with opportunities.”

<