SVS Securities - shut down?

johnburman

Masonic I agree wiht most of what you say but I may have expressed my question poorly
If *all* shares go walkabout, and the max FSCS will pay is £85k, and you have shares valued at £80k and costs of £12k, how much will you receive form FSCS, £78k,  £80k, or £85k?  I say £85k (but what happens to the other £7k costs? [92-85k] I think that you will have to pay this to the administrators).  How much do you say?  And the balance...?   

masonic

johnburman said:

Masonic I agree wiht most of what you say but I may have expressed my question poorly
If *all* shares go walkabout, and the max FSCS will pay is £85k, and you have shares valued at £80k and costs of £12k, how much will you receive form FSCS, £78k,  £80k, or £85k?  I say £85k (but what happens to the other £7k costs? [92-85k] I think that you will have to pay this to the administrators).  How much do you say?  And the balance...?   

If all shares go walkabout and you have shares valued at £80k and costs of £12k, then you will receive £80k compensation and the administrator is entitled to deduct the £12k from your missing shares should they ever turn up (the FSCS would get the rest up to £80k and in the unlikely event there was anything left after that, for example the shares were worth much more than when previously valued, you'd get the remainder).

Pre-empting the next question... If you have shares valued at £80k and £68k of those go missing, you could either: (a) claim £80k compensation from the FSCS and give up your right to the shares (Liquidation option); (b) write a cheque for £12k, claim £80k compensation from the FSCS and get £12k of shares back (Cash option); or (c) claim £68k compensation from the FSCS and get £12k of shares back, leaving the administrator to claim another £12k from the FSCS on your behalf (Compensation option).

The scenario in the first paragraph is essentially another example of the liquidation option.

johnburman

Sorry i dont quite agree
The FSCS will pay you <85K for your civil loss suffered.  this is loss of shares and administrators charges.  You will get back £85k only from the FSCS (and lose entitlement to the shares).  What I do not know is what happesn ot the other £7k.  The FSCS will not pay it (they are over the £85k max), and so you will have to.

look what happened at Beaufort:
https://www.pwc.co.uk/business-recovery/administrations/beaufort/costs-and-cost-allocation-paper.pdf   

johnburman

sorry I missed out this bit, from the Beaufort document:
 For many larger corporates, however, the costs will need to be paid for by the client or deducted from its client money or client assets.  
i would be in that position

masonic

johnburman said:

Sorry i dont quite agree
The FSCS will pay you <85K for your civil loss suffered.  this is loss of shares and administrators charges.  You will get back £85k only from the FSCS (and lose entitlement to the shares).  What I do not know is what happesn ot the other £7k.  The FSCS will not pay it (they are over the £85k max), and so you will have to.

look what happened at Beaufort:
https://www.pwc.co.uk/business-recovery/administrations/beaufort/costs-and-cost-allocation-paper.pdf   

The Beaufort document spells it out quite clearly in the notes: "Client assets cost allocation calculated at a flat £10,000 per account, unless the value of the assets held in the account is less than £10,000, in which case the allocation is “capped” at the value of the assets in the account. This £10,000 may also be the subject of a rebate when the final administration costs are known."

If an investor bought £80k of investments, and 100% of that went walkabout, the value of the assets held in the account is £0 and so the allocation would have been "capped" at £0. Missing assets cannot be said to be held in the account.

My2penneth

If the ISA accounts can be bulk transferred by 8th June...why can't the non ISA accounts?

The only difference would be a flag to say " this is held in an ISA".

masonic

My2penneth said:

If the ISA accounts can be bulk transferred by 8th June...why can't the non ISA accounts?
The only difference would be a flag to say " this is held in an ISA".

The ISA accounts would probably require more work to transfer than non-ISA accounts, given the added complexity of ISA regulations. Perhaps a decision has been made to prioritise transfer of ISAs.

Alexland

Perhaps some of non-ISA accounts contain complex investments..

gibson81

Good morning all, I note the earlier comment about iweb refusing transfers in temporarily. Is this a common position due to coronavirus? Or are some providers allowing transfers in? 

masonic

gibson81 said:

Good morning all, I note the earlier comment about iweb refusing transfers in temporarily. Is this a common position due to coronavirus? Or are some providers allowing transfers in? 

Some providers are still accepting transfers, but transfers tend to be subject to extra delays at this time.