FSCS mentions Alpari (UK) only once in annual report for 2016/17

Maria Nikolova

Whereas in 2015/16, the insolvency of Alpari (UK) was one of the key topics for FSCS, the now defunct broker is mentioned only once in the FSCS Annual Report for 2016/17, with regard to legacy issues.

The importance of January 15, 2015 events and their consequences for the Forex industry is apparently starting to fade for authoritative bodies, as the name of Alpari (UK) – the retail FX broker that went insolvent as a result of these events, is mentioned only once in the Annual Report for 2016/17 by the UK Financial Services Compensation Scheme (FSCS).

The name of the now defunct broker which is currently under administration is mentioned in a part of the text entitled “Legacy of 2008”. The text goes as follows:

“FSCS continues to work hard to maximise recoveries from the estates of failed firms and from third parties responsible for customers’ losses. Since the 2008/09 banking crisis, we have recovered £4.5bn from the estates of the failed Icelandic banks, London Scottish Bank, Keydata Investment Services, MF Global and Alpari (UK) Limited.”

There is not even a single mention about LQD Markets (UK), which also went insolvent following the “Black Swan” events of January 2015.

By contrast, in its report for 2015/16, the Scheme stressed the amount of compensation paid to clients of Alpari (UK) and LQD Markets (UK) and said that “these defaults highlight the need for FSCS to respond to sudden and unexpected firm failures quickly, returning client funds to customers through a streamlined payments process.”

The FSCS notes in its 2016/17 report that no investment intermediation firms have been placed into the Special Administration Regime this year, in contrast to the large numbers of claims in this segment in recent years.

As the table below illustrates, the number of new claims concerning investment intermediation firms fell to 6,325 in the year to March 31, 2017, compared to 16,256 in the year to March 31, 2016.

Across all financial services firms, during the year, total compensation payments made by FSCS were £351 million, up from £271 million in 2015/16. The rise in compensation payments is attributed to a big increase in general insurance claims resulting from the failures of Enterprise and Gable Insurance AG (Gable).

In June this year, the joint special administrators (JSAs) of Alpari (UK) published a notice on the final client money distribution. The amount of the final client money distribution was put at 27 cents in the $ (USD). This is set to take total client money distributions to 82 cents in the $.

According to the JSA’s 4th Progress Report, covering their work on the case from July 19, 2016 to January 18, 2017, to date, 94,375 clients got access to the Claims Portal, whereas 16,278 clients have agreed their claim representing 96.2% by value of clients with a claim into the Client Money Pool (CMP). The report said the JSAs have paid a total of about $51.8 million from the CMP to 12,503 clients, representing approximately 53% of the CMP. The administrators forecast back then that total claims into the CMP will reach $97.8 million.

Read this next

Metaverse Gaming NFT

DCentral Miami brings together all of Web3, NFT, DeFi, Metaverse

The world’s biggest Web3 meeting entitled DCENTRAL Miami is set to take place November 28-29, featuring a lineup of some of the biggest and most influential names in the blockchain space.

Digital Assets

Crypto ban expands across UK banks as Starling joins ‎crackdown

UK digital bank Starling has banned ‎all customer payments related to cryptocurrencies, another blow for the crypto traders ‎who recently saw a sizable number of banks deciding not to ‎finance the wobbly asset class.‎

Interviews

Markets Direct at FIA EXPO 2022: Traders know what they want from brokers

The FIA Expo 2022, one of the most prestigious events within the global derivatives trading industry, took place in Chicago on 14 & 15 November.

Interviews

FIA Expo 2022: TNS addresses public cloud limitations with hybrid infrastructure

November is the month of the FIA Expo, one of the largest futures and options conferences in the world, bringing together regulators, exchanges, software vendors, and brokers in one place: the Sheraton Grand Chicago Riverwalk. 

Retail FX

Italy’s regulator blacks out Finance CapitalFX, MFCapitalFX

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

Suspected leader of Honk Kong ramp-and-dump scam appears in court

A leader of a sophisticated ramp-and-dump scheme made his first court appearance in a Hong Kong court today, charged with market manipulation and various criminal offences. The case stems from an earlier joint operation of Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), and the local police. 

Institutional FX

Cboe’s James Arrante discusses growing demand for fixed income, FX algo

We caught up with James Arrante, senior director of FX & US treasuries product and business management at Cboe Global Markets, to uncover emerging trends in the FX and fixed income markets and learn more about the bourse operator’s recent initiatives.

Retail FX

Eurotrader acquires UK broker Petra Asset Management

Eurotrader Group has formally entered into the UK market with the acquisition of FCA-regulated broker, previously named Petra Asset Management Ltd. The new entity operates under the brand name Eurotrade Capital Ltd.

Inside View, Retail FX

The Game of Chess Continues – OPEC, China and the Oil Market

Over the past decade, the US has been complaining about the amount of power which the BRIC group, and specifically China, has on the global economy. BRIC stands for Brazil, Russia, India and China; these were the world’s fastest growing economies. Only in the past 10 months, the US has turned their attention toward OPEC due to the prices of fuel. Nevertheless, China seems to have a strong influence even over the price of crude oil.

<