SVS Securities’ liquidators to conclude administration process in early 2022
A date for concluding the distribution of the assets of failed broker SVS Securities, which was dissolved in August 2019, was set by administrators from Leonard Curtis.
The special administration proposed to conclude the process of client money distribution in early 2022, per an update published today.
“Once the administration has been concluded and the Administrators have obtained their discharge of liability, the Administrators will no longer be able to process and respond to client information requests or Data Subject Access Requests (“DSAR”),” the legal notice explains.
Clients are therefore encouraged to contact the administrators as soon as possible should they wish to request their account information from SVS.
The majority of failed wealth manager SVS Securities’ clients have already received their compensation. Administrators arranged transfers for 99% of the company’s clients to financial advice and investment services company ITI Capital, which had bought the vast majority of clients’ books. This action typically allows clients to avoid paying exit fees on their transferred funds.
A very small number of clients, however, were not eligible to be transferred to other platforms. Leonard Curtis contacted these clients separately regarding options available for the return of their custody funds, which have been beyond reach for almost two years.
In addition, less than 1 percent of SVS clients are not entitled to recover their losses in full because their investment limit did not meet FSCS’ conditions for compensation. These are a few corporate clients and one individual trader whose losses exceed the lifeboat scheme’s limit of £85,000 per claimant.
Rather than incurring additional costs to hold a few remaining assets, administrators offered to sell unclaimed client assets and transfer the proceeds to SVS’ bank accounts for the benefit of its creditors. As such, those who have not sought compensation will instead be treated as unsecured creditors against SVS, though it is not guaranteed that late filings will be considered.
SVS Securities was put into special administration back in August 2018 after the FCA said it promoted high-risk bonds to retail investors and could not explain how it valued illiquid assets.
The regulator said SVS had questionable commission arrangements “without apparent regard for the investment needs of customers,” resulting in high fees and charges, which had negatively impacted clients.
Furthermore, the UK’s lifeboat scheme opened its online claims service for SVS clients who wish to make further claims other than for the return of assets and money. The FSCS anticipates that other than a very small number of exceptions, the SVS clients are expected to get a ‘full return’ of their cash investment.
Former clients of SVS Securities had ActivTrades plc UK and ITI Capital as two options available to them to access their money.