SVS Securities PLC (SVS), a stock, CFDs broker and corporate finance advisory firm, has been put into special administration after the FCA said it conducted “urgent supervisory work” and identified “serious concerns” about how the company was operating its business.
The FCA register says that SVS has agreed to cease all regulated business and retain all its assets.
“Following action taken by the FCA to impose requirements on SVS stopping it from conducting regulated activities and restricting it from disposing of its own or its clients’ assets, the directors considered the viability and solvency of SVS. They obtained solvency advice and resolved to place the firm into Special Administration,” the watchdog said.
In a note sent by the FCA on August 5, the regulator said that special administrators Julien Irving, Andrew Poxon, and Alex Cadwallader of Leonard Curtis will carry out the proceedings and contact all affected customers “in due course” after assessing what client money is held by the firm and its current financial position.
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A wide-ranging probe into the asset management industry
The FCA warned that in the event clients are short-changed, claims may fall on the Financial Services Compensation Scheme. The FSCS will cover custody assets and client money shortfalls, including the costs associated with their distribution back to clients, for eligible clients up to £85,000.
The regulator also clarified that SVS is still authorized by the FCA and remains subject to its oversight rules. After assessing if the business would be wound down, SVS Securities may enter insolvency under the Special Administration regime, which was bought in 2011 to solve failures at firms covered by the FCA’s Client Asset Sourcebook rules.
SVS Securities is a provider of trading services in stocks, CFDs, IPOs, and corporate finance, authorized and regulated by the Financial Services Authority. It provides a variety of investment management services including advisory and brokering execution, IPO private equity services, and an institutional desk.
The latest move is part of a wide FCA probe into the UK’s asset management industry that began in 2016, which revealed concerns about the actual value that investors are receiving from money managers.