An update published today by Leonard Curtis said the UK high court of justice is expected to approve their application to bring the special administration of the failed wealth manager SVS Securities to an end.
The application is scheduled to be heard on 15 March 2023. Once confirmed, the liquidators shall have permission to move SVS from special administration to dissolution.
“The Administrators be discharged from liability, pursuant to paragraph 98(2)(c) of the Act as modified by Regulation 15 of the Regulations, with effect from 28 days after the date on which the Administrators’ appointment ceases to have effect, save in relation to claims made before that date,” the statement reads.
The special administration proposed to conclude the process of client money distribution in early 2023. 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.
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 2022, 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.