The Financial Conduct Authority (FCA) imposed restrictions on IBP Markets Limited, a wholesale broker, on September 15, 2023. This is due to the regulator's concerns about the business conduct of the firm and to protect clients' funds.

Subsequently, the regulator has halted IBP Markets from conducting regulated activities and prevented it from devaluing its assets, clients' money, and custody assets without its consent.

FCA's Restrictions against IBP Markets

The FCA had previously worked with IBP Markets to address concerns about its business operations, leading to voluntary restrictions on regulated activities in May 2023. However, due to subsequent concerns about the protection of clients' funds, the FCA decided to stop the firm from conducting regulated activities.

Early this year, the FCA initiated action against IBP Markets, restricting its business activities, according to a report by Bloomberg. These restrictions were based on concerns that the company could not reconcile clients' assets and that the integrity of the information it used for reconciliation was in question. Additionally, the FCA raised concerns about the potential involvement of the company in financial crime.

In light of these restrictions and to safeguard the interests of clients, the directors of IBP Markets applied to place the firm in special administration. On October 13, 2023, the court appointed David Philip Soden and James Robert Bennett from Teneo Financial Advisory Limited as joint special administrators.

IBP Markets Faces Special Administration

IBP Markets held a substantial amount of client assets, with approximately £36 million ($44 million) in client money and £653 million in client custody assets, according to documents prepared for the court hearing. Clients, including wealth management firms and professional firms, will receive proposals regarding the special administration process within eight weeks of the appointment of the administrators. This will include information on how to make claims.

Special administration is an insolvency procedure designed for investment firms, where special administrators are appointed by a court to take control of and manage the operations of an insolvent firm. The objective is to expedite the process of returning funds to clients, safe custody of assets, and engage relevant authorities to rescue the company or wind it up.