SVS Securities administrators report progress on transfer of custody assets and client money

The administrators of SVS Securities plc, an investment firm offering broker-dealer and discretionary managed services, today published an update to clients of the firm.

The Administrators say they have entered into an agreement with a nominated broker in respect of the transfer of the vast majority of SVS’s custody assets and client money to that broker. The nominated broker is a London Stock Exchange member firm and is an FCA regulated entity with all appropriate permissions for the transfer and holding custody assets and client money for clients.

In order to transfer custody assets and client money to the nominated broker, the Administrators will have to submit a Distribution Plan for approval by the Creditors’ Committee and by the Court. The Distribution Plan must be approved by the Creditors’ Committee and then by the Court before it can come into effect.

Approval from the Creditors’ Committee is being sought this month (on April 21, 2020), and the Court hearing for approval of the Distribution Plan has been listed at the earliest available date, being May 7, 2020.

Upon approval of the Distribution Plan by the Court, the Transfer Agreement permits the nominated broker a ten-week period in which to complete the transfer. During this period, both the Administrators and the nominated broker will be required to take certain steps to migrate clients, custody assets and client money onto the nominated broker’s systems.

On this basis, the Administrators anticipate that custody assets and client money will be returned to clients no earlier than July for clients who qualify for the transfer to the nominated broker. Certain clients will not be eligible for such transfer unless they have taken certain actions within a period of weeks following the approval of the Distribution Plan.

Let’s recall that, as per the report issued by the Administrators in February 2020, have secured client money of approximately £24.9 million, in full, from across 20 pre-appointment bank accounts.

The Administrators initially estimated that SVS Securities had approximately 21,000 clients, however, after conducting further analysis on the client and account base that is held across three different IT platforms, the Administrators identified a number of clients holding multiple accounts with the company. This further analysis has identified approximately 19,200 unique clients. The custody assets and client money are held by a mixture of execution only, discretionary and FX clients. As at August 5, 2019, SVS’s account base comprised 14,855 equity accounts (including 773 discretionary accounts), 10 prime broker accounts and 6,547 FX accounts.