SVS Securities Creditors’ Committee approves distribution plan

The joint special administrators of SVS Securities, an investment firm offering broker-dealer and discretionary managed services, have confirmed that the final terms of the Distribution Plan were approved by the Creditors’ Committee on April 21, 2020.

The Court hearing for approval of the Distribution Plan has been listed at the earliest available date, being May 7, 2020. If approved by the Court, the Distribution Plan will enable clients to access their Client Assets from mid-July 2020 onwards through a nominated broker which has entered into a sale and purchase agreement with SVS. The identity of the nominated broker is expected to be disclosed at the end of May ahead of the date that the transfer will take place.

The Distribution Plan determines how Client Assets will be returned. The vast majority of Client Assets will be returned to Clients in full through a transfer to the Nominated Broker.

The Distribution Plan itself does not deal with Client Money, which is required to be returned under a separate legislative regime.

Other than a very small number of large corporate clients and one individual with a large holding of Client Money whose losses will exceed £85,000 (all of whom have been informed), the costs of returning Client Assets and the costs which would otherwise be deductible from those Client Assets are being paid by the FSCS. A very small number of Clients will also have shortfalls in their Client Assets or Client Money, which will also be eligible for compensation from the FSCS.

Clients of SVS Securities are advised to read the Distribution Plan and accompanying documents carefully.

Unless clients wish to attend the hearing of the application for the approval of the Distribution Plan, thy do not need to do anything further until instructed to do so by the Administrators. Clients are not required to attend the Court hearing on May 7, 2020, but may do so if they wish by contacting the Administrators to obtain details of the hearing on [email protected] .

The Administrators are set to make available to every claimant a Client Statement, which will set out relevant information relating to one’s Client Assets as described in the Distribution Plan, including one’s share of the Costs and Costs Allocation Value. The Client Statements will be available to view on the Portal (https://LeonardCurtis.InsolvencyData.co.uk) in mid-May.

The Administrators have concluded that the most appropriate strategy for the return of Client Assets is an orderly and coordinated transfer to a single regulated broker. The Administrators have selected a preferred broker for the transfer, the Nominated Broker, whose identity and contact details will be notified to Clients on or around June 1, 2020.

The transfer to the Nominated Broker is intended to cover the vast majority of Client Assets. To the extent possible, any Client Assets not transferred to the Nominated Broker will be returned by another means at a later date. The consent of clients is not required for the transfer of their Client Assets and Client Money.

The Administrators intend to effect the transfer of Client Assets to the Nominated Broker following the expiry of the period provided in the Distribution Plan for clients to submit a dispute to Court, with clients expected to be able to access their Client Assets and engage with the Nominated Broker from mid-July 2020. Clients should not contact the Nominated Broker until then. Until that time, any queries should be directed to the Administrators at [email protected] .

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.