SVS Securities’ saga comes to end as administrators conclude distribution

abdelaziz Fathi

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.

SVS Securities

The special administration proposed to conclude the process of client money distribution in early 2023, per an update published today.

Liquidators 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.

The statement reads:

“The Administrators hereby notify the clients and creditors of the Company of the Administrators’ intention to make an application to Court for an order bringing the special administration of the Company to an end and discharging any liability of the Administrators in respect of any of their actions as joint special administrators of the Company. The Administrators consider that the most appropriate exit route is to file a notice of the Company’s dissolution once all relevant distributions have been made and all statutory obligations have been dealt with.”

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.

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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