SVS Securities - shut down?

Reaper

to_jackie_too wrote: »

This is incorrect. A broker/platform needs explicit permission (in their Terms & Conditions) in order to be allowed to lend out their clients' shares. And I'm not aware of any UK-based platforms which include that in their T&Cs.

Thanks for the correction, I thought I had read they did but I must have been mistaken.

However if you buy funds or ETFs with your account then you can still end up lending to short sellers.
https://www.ft.com/content/d4706b0e-e40a-11e7-a685-5634466a6915
https://www.theguardian.com/business/2011/aug/31/stock-lending-short-selling (bit old this article but I doubt anything has changed)

johnburman

4 points:

First we should know could (and if so were) 'my' shares held in my XO account 'lent' to short-sellers?

Secondly, see this article
News Kodal Says Struggling SVS Committed To GBP200,000 Worth Of Shares (Alliance News) - Kodal Minerals PLC said on Tuesday it is seeking confirmation from SVS ...
Alliance News6 August, 2019 | 1:20PMEmail Form
(Alliance News) - Kodal Minerals PLC said on Tuesday it is seeking confirmation from SVS Securities PLC about whether it will pay the GBP200,000 it committed during a share placing last week.

Broker SVS entered administration on Monday but a week prior it subscribed to 250.0 million shares during the scheme, with the transaction due to settle on August 12.

The mineral explorer intended to raise a total of GBP575,000 from the placing and subscription.

Shares in Kodal were down 15% at 0.070 pence each in London on Tuesday afternoon.



Thirdly the Leonard Curtis website has been updated to include the Court Order for the Special Administration

Fourthly, if they can update the website, can they not update all the 14k worried clients of the firm, or at least contact those who have contacted them and given them their email addresses?

A worried former client of SVSXO

PS: this forum seems the best place to go for info. Is there anywhere else?

[Deleted User]

It would be helpful if the question mark in the title to this thread could be removed. Anyone reading the title might be confused and think that SVS is still tradiing.

My2penneth

Lending to short sellers...No. (See earlier comments from Reaper.)

Part of the stuff SVS did was to try to raise money from investors to invest in stuff that might ( might) one day be profitable such as the mining companies you mention. They need the money to keep going until they strike gold ( or whatever they're mining!). Kodal will not get money from SVS on Aug 12th .....the books are frozen.. Companies such as Kodal will be frantically looking for another source of funding...maybe another broker. So, there is a knock on effect.....some of the companies expecting funds from SVS may collapse... I'd only be concerned if I was already invested in such companies.

The administrators only started work on Monday...this will take months to sort out....

It would be worth spending 10 mins or so reading through the previous posts.

Reaper

johnburman wrote: »

if they can update the website, can they not update all the 14k worried clients of the firm

It's far better to update a web site than emailing everybody. Particularly if people want to have email discussions with them. If they charge by the hour then 14k people all emailing with similar questions is inefficient and expensive with money to pay for it coming out of the remaining SVC assets.

My2penneth

Didn't PwC try to charge £900 per hour for administration of Beaufort ( their charges were challenged and reduced).

You'd think putting a company into admin would follow a template procedure...god knows why PwC thought they could get away with such a ridiculous charging rate...they probably used interns to do the donkey work anyway!

The FCA and we investors should be asking how much will this cost and for them to justify their fees.

masonic

My2penneth wrote: »

Didn't PwC try to charge £900 per hour for administration of Beaufort ( their charges were challenged and reduced).

You'd think putting a company into admin would follow a template procedure...god knows why PwC thought they could get away with such a ridiculous charging rate...they probably used interns to do the donkey work anyway!

The FCA and we investors should be asking how much will this cost and for them to justify their fees.

Administrators always try to charge their full commercial rate. It is very easy for them to provide a very convincing justification for the fees incurred, as this is integral to the way they work. It is usually contingent upon the creditors committee (if formed) to challenge fees, so it is helpful to have someone sufficiently knowledgeable on the committee.

I'd like to think investors will be keen for fees to be kept down - after all, they, along with all of us will foot the bill in the long run after the FSCS pays out and recoups the money through its industry levy. But in the end no investor is likely to pay anything towards the fees directly, even with the most exorbitant rates, I doubt an administrator could run up enough fees to exhaust the £85k per investor compensation limit.

Hodge31

I assume that shares currently held in SVS XO accounts (if no other) will need to be moved to other providers. Does anyone know how this will be done? There are several possibilities some of which I imagine the administrators could charge for. I spoke earlier to Interactive Investor (who didn't know of this SVS issue!!) and they said that usually a client would complete an instruction on their site and they would arrange the transfer for you at no charge. As providing a service these days is not usually gratis can one assume there must be a benefit so they presumably would like to mop up a few of these potential accounts. If they're happy to do it free for one transfer imagine their delight at getting at even a few of 13500! Is there any merit in uniting to gain some extra benefit?? Probably not - just a thought. However, iWeb appear to charge a £25 account opening fee??!
Is this just wishful thinking?

My2penneth

Hodge
Just look at what was done for Beaufort. Have a read back through these postings..its all been discussed there.

Essentially clients were transferred to The Share Centre, accrued dividends were paid to holders into their new accounts and the FCA compensated PwC for their work.. Reaper provides a hint as to why this was attractive for PWC to move clients to TSC ( a financial incentive)

Personally, I feel that the FCA did a grand job. If it goes like the Beaufort Securities route I'll be having a little tipple and raising a glass to the FCA.

My2penneth

I suspect that if you phone interactive investor you will be directed to a salesperson whose interest in financial matters and trading on exchanges is probably limited - they'll be following a script. The collapse of SVS hasn't exactly hit the BBC news (it took a while for the Daily Mail to register and report on it...maybe as a result of my email to them!).