The administrators of the now-defunct SVS Securities, representatives from Leonard Curtis, published a progress report on Friday, outlining the status of the return of funds owed by the failed broker to its clients and creditors.
The report, which included the administrators’ activities between 5 February 2021 and 4 August 2021, detailed that the majority of the funds were returned to the clients.
“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,” Leonard Curtis stated.
“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.”
Covered by FSCS' Compensation Scheme
However, the administrator pointed out that a small number of SVS clients, which constitutes less than 1 percent of the total, will not receive their full proceeds as the amounts were not eligible under the UK’s FSCS protection limit. It has a compensation limit of £85,000 per claimant.
The claims of only a few corporate clients and one individual client are exceeding the limit of FSCS compensation.
SVS was placed under special administration in August 2019 after the Financial Conduct Authority stopped it from conducting business over concerns of its operations.
Moreover, the administrators highlighted that the cost of returning the custody assets and client money is still to be determined, but it put forth a conservative estimated budget of £44.5 million. Though this returning amount is to be notionally borne by SVS clients, ‘the vast majority of the company's clients are eligible for FSCS compensation, and so those costs will be, or have been, effectively paid by the FSCS.’
“The full return to clients, by way of the transfer to ITI, has only been possible because of compensation paid by the FSCS to cover the shortfall which would otherwise be created by deducting the costs of the Administrators from Client Money and/or Custody Assets,” the report added.
