SVS Securities Plc

In special administration 25 November 2019

FRN: 220929

SVS Securities plc (SVS) was placed in Special Administration by its directors on 5 August 2019. Julien Irving, Andrew Poxon and Alex Cadwallader, of Leonard Curtis Recovery Ltd have been appointed Special Administrators of SVS.

SVS Securities plc is a wealth management firm that offers a range of services to its clients, including advisory stockbroking, online share dealing, foreign exchange trading and discretionary fund management services.

The directors of SVS decided to place the firm in Special Administration. This was following action taken by the FCA to place requirements on SVS, stopping it from conducting regulated activities and restricting it from disposing of assets. The FCA took these steps after it identified serious concerns about the way the business was operating. As a result, the directors obtained solvency advice and resolved to place the firm into Special Administration.

See our investment compensation limits and their conditions on our Investments page.

Find contact details for Leonard Curtis Recovery Ltd by clicking the Information tab below and scrolling down.

Download the Determination papers (pdf 1.0MB).

  • 02 Dec, 2019

    The Joint Special Administrators (JSAs) have now contacted customers of SVS Securities plc ('the Company'). They're inviting them to make claims to client money and assets via an online client portal.

    This is the next stage in returning property to the Company’s customers. 

    It is hoped that the distribution plan (which will need to be agreed by the Creditors’ Committee and the Court) will enable customers holdings to transfer whole to a new broker.

    For this to happen, FSCS plans to meet the costs of the Special Administration on behalf of each eligible customer, up to £85,000. We intend to pay the JSAs directly. 

    However, if a customer states that they do not want FSCS compensation when offered it in the portal, the JSAs will not be able to transfer the customer’s property to a new broker without deduction. 

    Accepting FSCS compensation is subject to our terms and conditions.

  • 01 Nov, 2019

    FSCS is pleased to make an announcement to those customers categorised by the Joint Special Administrators as 'Elective Professional Clients (EPC) holding an FX account balance': FSCS will be able to protect eligible claimants – individuals and small businesses – within that group whose money has not been returned.

    We’ve reached this decision because of the type of investment, and because of the way the investment was held. We can cover shortfalls for eligible customers with valid claims up to our compensation limit of £85,000.

    We are currently working with the Special Administrators to work out the best way to return money. At this stage EPC Clients do not need to do anything. There is no need to make an application to FSCS about SVS Securities at the moment. FSCS will make further announcements as soon as we know more.

  • 22 Aug, 2019

    We have been made aware of a fraudulent letter that claims to come from the Special Administrators Leonard Curtis. Please ignore the letter. For more details visit the SVS page on the Leonard Curtis website.

  • 05 Aug, 2019

    The Special Administrators will carry out an assessment of the client money and assets held by the firm to confirm the current position. Following the assessment, the Special Administrators will work to return as much client money and assets to customers as possible, as quickly as possible. Should the Special Administrators find that the firm does not hold enough client money or assets, then FSCS will cover asset and client money shortfalls, including the costs associated with their distribution back to clients, for eligible customers up to our compensation limit of £85,000.

    FSCS is working closely with the Special Administrators to determine the firm’s position in respect of client money and assets and will provide further updates. At this stage there is no need for customers to make a claim with FSCS. Customers should subscribe above to receive the latest updates on SVS.

Allocation of costs / FSCS compensation

At the creditors’ and clients’ meeting on 10 October 2019, questions were asked about the costs of administration and the impact on portfolios of different size. So, we’ve put together some examples in the tables below. These show whether FSCS compensation (limited to £85,000 per eligible client) is enough to cover the costs of transferring clients’ portfolios to a new broker.  Eligible clients are individuals and small companies (as defined in the Companies Act 2006).

These examples deal with the costs of transferring portfolios.  FSCS has made a separate announcement regarding the claims of SVS clients who had foreign exchange trading accounts, including Elective Professional Clients.

The examples are based on two earlier broker failures, where FSCS paid compensation and assume:

  • client money costs will be charged at a percentage of the balance held (as required by the relevant rules)
  • asset transfer costs will be set as a flat fee, capped at the value of the transferred assets.

The special administrators have suggested that this is what they’d like to do, and FSCS agrees that it would be the best option. But this action will need to be agreed by the creditors’ committee as part of the distribution plan.  Also, the plan will need the approval of the court, at some point in the future. These assumptions could change, so there could be a difference in the costs clients could face. 

The level of costs that SVS will have to carry also still has to be agreed between the administrators and the creditors’ committee. This means that the final figures could be quite different to the two examples. All the same, we think the tables below will help show which SVS clients may have to bear some of the costs of the administration.

The tables set out the compensation payable by FSCS and shortfalls payable by the client in eight example portfolios, ranging in value from £10,000 to £2 million.

Firm A

  • FSCS to pay costs of up to 10% of client money and £10,000 for asset transfers. The example shows these costs capped at the current limit of £85,000.
  • clients with assets (shares and/or bonds) of any amount and a cash holding of £750,000 or less would bear no cost*.
  • clients with cash balances larger than £750,000 would have to pay a contribution (which can be deducted from the cash balance prior to transfer).

Firm B

  • the model shows FSCS agreeing to pay costs of up to 16% of client money and £2,250 for asset transfers. The example shows these costs capped at the current limit of £85,000.
  • the equivalent cash balance is £517,187.50 (again for clients who also hold assets of any amount).

*Clients with assets worth less than £10,000 would be able to be compensated in full for cash balances up to £850,000 as their asset transfer costs would be capped at the value of the assets and the balance of £85,000 compensation available to cover cash costs.

Firm A

  Money held Asset value Total portfolio Money charge  Asset charge Total charge Compensation Shortfall
A 5,000 5,000 10,000 500 5,000 5,500 5,500 -
B 5,000 20,000 25,000 500 10,000 10,500 10,500 -
C 5,000 95,000 100,000 500 10,000 10,500 10,500 -
D 50,000 50,000 100,000 5,000 10,000 15,000 15,000 -
E 100,000 250,000 350,000 10,000 10,000 20,000 20,000 -
F 500,000 500,000 1,000,000 50,000 10,000 60,000 60,000 -
G 750,000 500,000 1,250,000 75,000 10,000 85,000 85,000 -
H 1,000,000 1,000,00 2,000,000 100,000 10,000 110,000 85,000 25,000

 

Firm B

  Money held Asset value Total portfolio Money charge Asset charge Total charge Compensation Shortfall
A 5,000 5,000 10,000 800 2,250 3,050 3,050 -
B 5,000 20,000 25,000 800 2,250 3,050 3,050 -
C 5,000 95,000 100,000 800 2,250 3,050 3,050 -
D 50,000 50,000 100,000 8,000 2,250 10,250 10,250 -
E 100,000 250,000 350,000 16,000 2,250 18,250 18,250 -
F 500,000 500,000 1,000,000 80,000 2,250 82,250 82,250 -
G 517,188 500,000 1,017,188 82,750 2,250 85,000 85,000 -
H 1,000,000 1,000,000 2,000,000 160,000 2,250 162,250 85,000 77,250

 

Notes

Although the two examples are based on real events, at the time the limit for compensation was £50,000. It’s now £85,000 and the tables reflect this. Also, one of the firms involved FSCS returning client money before the distribution plan took effect – this has been remodelled to reflect the current intention to transfer cash and assets to a new broker at the same time.

 

 


Leonard Curtis Recovery Limited

If you’ve any questions, please contact the Special Administrators:

Website: www.leonardcurtis.co.uk/SVS

Email: svs@leonardcurtis.co.uk