of collapsed stockbroker SVS Securities today said they held an initial meeting where Julien Irving, Andrew Poxon, and Alex Cadwallader of Leonard Curtis presented their proposals to creditors and clients.
The resolution to approve the joint administrators’ proposals was passed by both creditors and clients and a creditors’ committee was elected.
All client money will be pooled into bank accounts controlled by the administrators, and once the overall total of claims is known, it will be returned on a pro rata basis, the statement said.
The proposals of the administrators also state, among other things, that the rescue of SVS Securities cannot be achieved, while client money and custody assets should be paid back before approving any distribution to creditors.
Leonard Curtis revealed that they are dealing with £277 million of custody assets, and £24 million of client money across 21,000 accounts. Further, there are around 670 unsettled transactions including certain bonds the value of which remains uncertain.
Any dividends earned by clients from shares held with SVS will be treated as part of their claim, but they won’t get them until all this is sorted out.
Significant interest to acquire SVS clients
The administrators are currently contacting relevant entities about any SVS investments held with them, and to discuss potential claims and arrangements to return money and shares.
It is unclear how long it will take for to get money back or have their accounts transferred to another provider, but it is likely to be some months.
But there is a possibility that SVS accounts could be transferred to another broker. The administrators confirmed that they received interest from more than 100 UK firms inquiring about a transfer of SVS business and client money to their own companies.
SVS Securities has been back in August, after the FCA said it promoted high-risk bonds to retail investors and could not explain how it valued illiquid assets.
The regulator also said SVS had questionable commission arrangements “without apparent regard” for the investment needs of customers, resulting in high fees and charges which it warned had “negatively impacted” clients.