FSCS is the UK's compensation fund of last resort for customers of authorised financial services firms.
The protection provided by FSCS is governed by the Financial Conduct Authority's (“FCA”) Compensation ("COMP") rules, which can be seen at the "Redress" section of the Financial Services Handbook:www.fshandbook.info/FS/
Further information about the FCA is available on its website:www.fca.org.uk
Samantha Bewick, Richard Heis and Mark Firmin of KPMG LLP were appointed as joint special administrators (JSAs) of Alpari (UK) Limited (“Alpari”) on 19 January 2015. Formal notice of their appointment as well as further information about the special administration is available to view at: www.kpmg.com/uk/alpari.
FSCS has investigated the nature of Alpari’s business and has concluded that valid protected claims are likely to arise. FSCS has been working closely with the joint special administrators to establish how we will align our respective claims processes and to determine the most effective method of processing compensation payments.
FSCS can pay compensation to eligible claimants up to a maximum of £50,000 per person for claims against Alpari relating to investment business regulated by the Financial Conduct Authority.
To qualify for compensation you must be eligible under the Financial Conduct Authority (FCA) COMP rules which set out which types of claim are eligible for compensation, and limit how much compensation we are allowed to pay.
Full details of who is eligible to benefit from FSCS protection can be found in subsection 4.2 of the COMP Rules:
The joint special administrators have set up an online claims portal, on which eligible clients are able to agree their client money claims. Further details are available on the joint special administrators’ website: http://www.kpmg.com/uk/alpari
Clients of Alpari will be able to confirm whether they wish to make a claim with FSCS via the Alpari claims portal.
If the client is an entity such as a company or trust, or is a joint investor, and the claim is agreed by the joint special administrator the client will be asked to complete an FSCS application form. The account holder(s) should then sign the completed form and return it along with any documentation that is relevant to the claim.
If you have specific queries about individual questions on the form, please contact the FSCS Customer Services Team on +44 (0)207 741 4100 and we will be happy to help you.
FSCS expects to start sending application forms to clients who have agreed their account balance on the Alpari claims portal from May 2015. If any client who is expecting to receive an FSCS application form has not received it within one month of agreeing their account balance, they should contact the FSCS Customer Services Team on +44 (0)207 741 4100.
If your claim is eligible for compensation, FSCS will be able to pay compensation once you have agreed your claim with the joint special administrators and confirmed you want to make a claim to FSCS on the claims portal. We currently expect the payments process to commence during May 2015.
Where the client is required to complete an FSCS application form, FSCS will send the FSCS application form once the client has agreed the claim with the joint special administrators and confirmed they want to make a claim to FSCS on the claims portal. We expect to start sending application forms from May 2015 onwards. Once returned, FSCS will aim to issue a decision in respect of an individual’s claim within three months of receiving a completed FSCS application form.
The joint special administrators will calculate your claim, for the purposes of the special administration, in terms of a ‘Client Money Entitlement’ claim and a ‘Contractual Claim Amount’ claim.
For the purposes of determining FSCS compensation, FSCS will calculate which of the two balances is higher, with reference to the Bank of England daily exchange rate of 1.5158 as at 19 January 2015. This will allow FSCS to calculate the compensation due to the client. FSCS will pay the higher of the two balances.
FSCS will make all compensation payments in US Dollars. This ensures that compensation payments will be consistent with the currency of Client Money Entitlement distributions made by the joint special administrators.
FSCS can pay compensation of up to £50,000 per claimant. The USD equivalent of this amount, as at 19 January 2015, was $75,790.
Compensation will be paid directly to the bank account you nominate in the Alpari claims portal process or directly to an ETX Capital account.
Yes. You can ask for compensation to be paid directly to your ETX account via the Alpari claims portal.
It is for individuals to choose which claim to pursue, but it is possible to register a claim with both the joint special administrators and FSCS.
If the joint special administrators pay a dividend before you are paid FSCS compensation, FSCS will deduct that amount from your agreed balance and pay you up to £50,000 to cover your remaining shortfall.
If FSCS pays a claim for compensation a claimant will be required to assign (legally transfer) all their legal rights in relation to their claim to FSCS. Relying on these rights, FSCS will seek to recover the total value of the claim against Alpari’s estate.
The compensation payment is in full and final settlement of your claim for compensation from FSCS. Your rights against Alpari and any relevant third parties are also assigned to FSCS.
If at any time you receive money from anyone other than FSCS or the joint special administrators relating to your Alpari losses, you must immediately declare it to us and to the joint special administrators.
If you have assigned your legal rights to claim against Alpari to someone else before you apply to FSCS, you are not entitled to any compensation payment. If you receive any payment from a third party after you receive FSCS compensation, you are legally obliged to inform FSCS and, if required to do so, to repay some or all of the compensation paid to you by FSCS.
If you choose to accept FSCS compensation, you will be required to assign all of your legal rights to claim in the special administration of Alpari to FSCS via the Alpari claims portal. FSCS will then claim in the administration and will claim for the whole of your loss, including the amount over £50,000. When FSCS receives the dividends in your place it will then pay back to you any amounts that you would otherwise have received if you had accepted the dividends before claiming on FSCS. Our rules require that you do not suffer a disadvantage whether you claim from us first or whether from the special administrators first.
Loss = £80,000
FSCS compensation = £50,000
Dividend of 50p/£ received from the joint special administrators by FSCS = £40,000
FSCS pays £30,000 to claimant so he is fully compensated (total £80,000), and retains £10,000 recovery for itself
Loss = £100,000
FSCS compensation = £50,000
Dividend of 50p/£ received from the joint special administrator by FSCS = £50,000
FSCS pays £50,000 to claimant so he is fully compensated (total £100,000), and retains nothing for itself
FSCS does not have to have made a full recovery of its £50,000 before it starts paying its dividend recovery on to claimants.
Claimants are not obliged to claim through FSCS, or to accept the offer of FSCS compensation. If you do not want to assign your Alpari claim to FSCS in exchange for the compensation, then you can refuse FSCS compensation and continue your claim in the administration. After you have received the dividend(s) you can return to FSCS to claim for any remaining shortfall.
If you choose to pursue your claim with the joint special administrator directly, you should advise them immediately, via the Alpari claims portal.