SVS Securities saga comes to an end as 99% of clients compensated

abdelaziz Fathi

An update published today by Leonard Curtis confirms that the majority of failed wealth manager SVS Securities’ clients have received their compensation.

SVS Securities

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 book. 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.

“The Administrators confirm that, other than a very small number of exceptions, the full Custody Asset and Client Money entitlements of Clients have been or are expected to be returned in accordance with the Regulations. For the vast majority of Clients, their Custody Assets and Client Money have been returned in accordance with the Regulations by way of transfer to ITI on the Transfer Date,” the statement further reads.

Earlier in March, the special administration proposed to conclude the process of client money distribution at a certain point, rather than incurring additional costs in continuing to hold a few remaining assets for a prolonged period.

Moreover, administrators offered to sell unclaimed client assets from that final date 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.

In addition, 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.

 

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