The Special Administrators of SVS Securities today published their final progress report to creditors and clients. This final progress report covers the period from 5 February 2023 to 30 March 2023.
The special administration is being concluded and the company is being moved from special administration to dissolution. The Administrators have applied to cancel SVS Securities’ FCA registration.
The Administrators confirm that, other than a very small number of exceptions (8 Clients), the full Custody Asset and Client Money entitlements of Clients have been returned in accordance with the Regulations. For the vast majority of Clients, their Custody Assets and Client Money were returned in accordance with the Regulations by way of transfer to ITI on the Transfer Date.
The legislation governing the special administration regime provides that the costs of returning custody assets are to be paid out of the custody assets. In respect of client money, the legislation requires the costs of returning client money to be deducted in a manner that results in every client having its entitlement to client money reduced by the same percentage. This means that the costs of returning Custody Assets and/or Client Money are ultimately borne by the Company’s Clients.
In connection with the Distribution Plan, an initial cost reserve needed to be set for the costs of the Special Administration of the Company which are deductible from Custody Assets and Client Money, which was set using a conservative estimated budget of £44.5m. As advised to Clients previously, this figure was expected to be subject to reductions and rebates as greater certainty as to the ultimate level of costs was achieved. The costs were also subject to assessment by an independent fee assessor appointed by the Creditors’ Committee.
The costs of the Special Administration have totalled £30.24m, of which £29.09m has been allocated as the costs of returning Custody Assets and Client Money.
Each Client’s share of the costs associated with returning Custody Assets and Client Money has been capped at £5,578.80 for Custody Assets (reduced from £10,626.50 as at the Effective Date) and 10% of any Client Money. Where Clients held Custody Assets valued at less than £5,578.80 as at the Effective Date, their share of the costs has been capped at the value of the Custody Assets as at the Effective Date.
Although the costs of returning Custody Assets and Client Money are notionally borne by the Company’s Clients, the vast majority of the Company’s Clients are eligible for FSCS compensation, and so those costs have been effectively paid by the FSCS. This has enabled the return to Clients of their full entitlement to Custody Assets and Client Money (other than 6 corporate Clients and one individual Client not eligible for FSCS compensation and one individual Client with a large Client Money claim whose losses exceed the FSCS’ compensation limit of £85,000 per claimant).
The full return to Clients, by way of the transfer to ITI, has only been possible because of compensation paid by the FSCS to cover the shortfall which would otherwise be created by deducting the costs of the Special Administration from Client Money and/or Custody Assets.
There were insufficient House Asset realisations, after the deduction of costs attributable to the Company’s house estate, to enable a dividend to be declared to preferential or unsecured creditors.
SVS Securities clients do not need to take any further action.
Please be advised that the dedicated call centre for enquiries is no longer in use. The dedicated email enquiry address will no longer be in use from three months from the Special Administration end date. Once the Administrators are no longer in office, they will not be able to respond to any further requests from Clients for information.
Should any Clients like to contact the FSCS directly in relation to claims for (among other things) mis-selling or negligence, their contact details can be found at www.fscs.org.uk/contact-us/.
