SVS Securities (In Administration)
Discussion
Only found out this morning via the Daily Fail that the above company who've I've been using for the last 15 years for execution only trading (3/4 times per year) went into administration last Monday.
Administrators have made no attempt to contact any customers, or at least not the 5 i know who use them.
I've no experience of this so am looking for a bit of help from the PH massive.
I have about 20-25 (small, <£2k) of UK equities held by them in an account in my name - what's the likely outcome ? A sale of the shares and funds to me (not my ideal choice as a lot are not where I'd want them to be right now) or the shares transferred to a different company and then I can trade again and how long might it take ?
Site says, as do the administrators, it's all FCA regulated and FSCS protected and my holding is way under the £85k so not a disaster but just not sure what the process is and the administrators said it would be months to resolve ?
Administrators have made no attempt to contact any customers, or at least not the 5 i know who use them.
I've no experience of this so am looking for a bit of help from the PH massive.
I have about 20-25 (small, <£2k) of UK equities held by them in an account in my name - what's the likely outcome ? A sale of the shares and funds to me (not my ideal choice as a lot are not where I'd want them to be right now) or the shares transferred to a different company and then I can trade again and how long might it take ?
Site says, as do the administrators, it's all FCA regulated and FSCS protected and my holding is way under the £85k so not a disaster but just not sure what the process is and the administrators said it would be months to resolve ?
Many moons ago they were a client of mine on the derivatives side but haven’t followed them for a long time.
They invested heavily in licenses to handle their own client money and clearing but there is a small chance that their physical equity positions were still held in client names which would make sorting things out for physical equity holders a little quicker.
I’ve been away but I did get a flurry of calls last week about this from other brokers and I can’t go into what we discussed but we think the demise is linked to a particular activity related to the professional money derivative side.
So long as you were classified as Retail for client money purposes and your investments are below the FSCS limit then all is fine but as JPH mentioned it will take time unless they package the physical equity retail clients out to another broker but they could only do that with the smaller clients as the larger ones and those who were elected up to professional will be part of the bail in.
I’m off tomorrow for a few more days but I’d be happy to talk over the phone.
To anyone else who reads this thread who have funds held on a professional basis or funds above the FSCS at a non big name CFD/spreadbet firm it may well be abvisable to reduce levels or switch to retail as the storm which has been brewing in this sector over passported firms and treatment of client money is looking like it is breaking.
They invested heavily in licenses to handle their own client money and clearing but there is a small chance that their physical equity positions were still held in client names which would make sorting things out for physical equity holders a little quicker.
I’ve been away but I did get a flurry of calls last week about this from other brokers and I can’t go into what we discussed but we think the demise is linked to a particular activity related to the professional money derivative side.
So long as you were classified as Retail for client money purposes and your investments are below the FSCS limit then all is fine but as JPH mentioned it will take time unless they package the physical equity retail clients out to another broker but they could only do that with the smaller clients as the larger ones and those who were elected up to professional will be part of the bail in.
I’m off tomorrow for a few more days but I’d be happy to talk over the phone.
To anyone else who reads this thread who have funds held on a professional basis or funds above the FSCS at a non big name CFD/spreadbet firm it may well be abvisable to reduce levels or switch to retail as the storm which has been brewing in this sector over passported firms and treatment of client money is looking like it is breaking.
uuf361 said:
Thanks for the info - I’m execution only and have not used any of their advisory services nor had any other funds with them, so purely a small Retail customer,
Guess I’ll wait and see what happens at the end of September when the administrators plan to tell customers something....
Something quick you can do is check the bottom of a trade confirm email for the details as to what FCA license you’ve dealt under, whether it is theirs (which I suspect it is) or whether it is another broker like Halifax, Barclays or Interactive etc. Guess I’ll wait and see what happens at the end of September when the administrators plan to tell customers something....
uuf361 said:
I would but have never had any confirmations by email - info is on stored on my account on their website or the app, neither of which are accessible any longer...
The rules may have changed but we’ve always been obliged to confirm transaction in writing somehow. Any correspondence should detail at the bottom how and where your assets were being held.
SusieWong said:
I’m in exactly the same boat. SVS holds my shares and probably some dividend. I have no paper or email evidence. I have traded solely online. I’ve emailed the administrators and await their reply.
I’ve called them - they were rude and unhelpful - they’ll send you the same letter that’s on the link on the SVS website in 8 weeks, but won’t be any more info seemingly before then...
I have my fiance's ISA with them currently. As above, fairly small beer so easily within the £85,000 threshold. I understand that getting access to these shares to transfer out could take quite a while but can I ask what happens to all the dividends that should be accruing over the same time period?
anonymous said:
[redacted]
Not at all. All client money is ring fenced (this is the same with SVS).One of the problems with SVS is that it was investing people into mini bonds. With Selftrade (and all the other retail platforms) you are selecting the investments, not them.
The one thing all the providers who have gone into administration have in common is that they were investing clients into mini bonds and the like.
SVS started life as a high pressure telesales derivatives operation based around advisory CFD services to retail investors.
As this activity was clamped down upon by their clearers and eventually the FCA, as the majority of brokers operating advisory CFD services were spank shops, the firms sought to move into less well regulated and more lucrative financial activities. First they moved towards FX, both trading and physical and for the last 5 or so years they have been heavily involved in the extremely lucrative P2P, minibond and offshore investment market and using SIPS and ISAs as a means to wrap these products up.
The reason these particular products are so lucrative is that they are not really regulated and mostly run by entities with no desire to actually risk manage as such products only work if there is very little risk management.
But the real money is made from there being no actual investment in the first instance. The introducing entity gets 25% of the clients money “, 10% is used to pay other client’s interest payments and the remaining 65% is just funnelled away offshore into the scheme owner’s account. So long as new clients keep sending fresh money in then it all keeps going but all client money is basically gone the moment it is sent over.
On the derivatives side another practice has been to elect retail clients up as Professional and then you can use their money for other activities. With less scrupulous firms this just means the money is sent to the owner’s offshore bank account.
This is not to say that this is what has been happening here but it has been a huge practice among passported firms and domestic high pressure sales firms and in 2019 the new client money has stopped flowing in in large enough quantities to keep a lot of the schemes going. Simultaneously the FCA has finally announced that it will be checking every firm’s professional and client money holdings.
The big, reputable firms may have a little bit of fringe exposure to this activity where they have been deceived by a spank shop but it really has nothing to do with the HL’s or SelfTrades.
As this activity was clamped down upon by their clearers and eventually the FCA, as the majority of brokers operating advisory CFD services were spank shops, the firms sought to move into less well regulated and more lucrative financial activities. First they moved towards FX, both trading and physical and for the last 5 or so years they have been heavily involved in the extremely lucrative P2P, minibond and offshore investment market and using SIPS and ISAs as a means to wrap these products up.
The reason these particular products are so lucrative is that they are not really regulated and mostly run by entities with no desire to actually risk manage as such products only work if there is very little risk management.
But the real money is made from there being no actual investment in the first instance. The introducing entity gets 25% of the clients money “, 10% is used to pay other client’s interest payments and the remaining 65% is just funnelled away offshore into the scheme owner’s account. So long as new clients keep sending fresh money in then it all keeps going but all client money is basically gone the moment it is sent over.
On the derivatives side another practice has been to elect retail clients up as Professional and then you can use their money for other activities. With less scrupulous firms this just means the money is sent to the owner’s offshore bank account.
This is not to say that this is what has been happening here but it has been a huge practice among passported firms and domestic high pressure sales firms and in 2019 the new client money has stopped flowing in in large enough quantities to keep a lot of the schemes going. Simultaneously the FCA has finally announced that it will be checking every firm’s professional and client money holdings.
The big, reputable firms may have a little bit of fringe exposure to this activity where they have been deceived by a spank shop but it really has nothing to do with the HL’s or SelfTrades.
JulianPH said:
Not at all. All client money is ring fenced (this is the same with SVS).
There seems to be some ambiguity on this point in this is money articlehttps://www.thisismoney.co.uk/money/diyinvesting/a...
"All client money will be pooled, and once the overall total of claims is known, it will be returned on a pro rata basis - meaning proportionately in terms of what is owed - with any individual shortfall covered by the FSCS up to the £85,000 limit."
Suggesting that if you have 150k or whatever it's not neccessarily ringfenced?
(just guessing)
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