SVS Securities - shut down?

johnburman

A very odd announcement from ITI set out in full below from their web site
"As you are aware..."  Oh no we are not. SVS/LC has not told us.
We are clients from 11 June but can not access our accounts until "the mid-July timeframe".  Why the delay of 5-6 weeks.  And in the meantime we are directed to LC again.

Ignoring the fact that we know nothing of ITI Capital, do they have the staff to deal with the transfer?  Is that the reason why they are telling us not to contact them?

And a PS.  Taking the statement at face value, what about dividends received after 18 May but before 11 June?
======================

As you are aware, the administrators of SVS have chosen ITI Capital Limited (“ITI”) to act as the single regulated broker to facilitate the return of your client assets and client money in an orderly and coordinated manner.

As part of this process, the vast majority of the SVS clients will become clients of ITI from the 11th of June, 2020. Your Client Statement made available to you by the Joint Special Administrators on 18 May 2020 identified which of your clients assets and/or client money are proposed to be transferred to ITI.

We will contact you individually with specific instructions on how to register for an account at ITI in due course. At this stage we are not in possession of your personal information or current holdings and therefore we are not currently in a position to assist you. We expect this to occur around the mid- July timeframe. Any query which you may have in the meantime should continue to be directed towards the Joint Special Administrators either by telephone on 0203 457 4871 or by email at svs@leonardcurtis.co.uk

johnburman

From Companies House
ITI Capital Limited:

Previous company names

Previous company names

Name	Period
WALBROOK CAPITAL MARKETS LIMITED	18 Dec 2015 - 10 Nov 2017
FXCM SECURITIES LIMITED	09 May 2011 - 18 Dec 2015
ODL SECURITIES LIMITED	16 Apr 2002 - 09 May 2011
OPTIONS DIRECT (EUROPE) LIMITED	06 Jun 1995 - 16 Apr 2002
OPTIONS DIRECT EUROPE LTD.	29 Jul 1994 - 06 Jun 1995
REVMARK INVESTMENTS LIMITED	05 May 1994 - 29 Jul 1994

johnburman

ITI provide ISAs.  Their "Rate Card" (a complex document - what is a "custody" charge?) says the below
ISA management fee Percentage on account value Charged quarterly 30bps per annum, minimum £7.5 per quarter 

masonic

johnburman said:

We are clients from 11 June but can not access our accounts until "the mid-July timeframe".  Why the delay of 5-6 weeks.

Presumably the delay of 5-6 weeks will be to allow the transfer to take place. I'm sure you appreciate that being registered as a client of ITI constitutes little more than loading some personal information into a database, and is probably a prerequisite for the more meaty task of re-registering all of the assets between the two nominee companies and populating people's accounts with holdings.

A "normal" S&S ISA transfer can take many weeks to complete, but generally you become a client on day 1 and can access your account within days of the process kicking off.

johnburman said:

ITI provide ISAs.  Their "Rate Card" (a complex document - what is a "custody" charge?) says the below
ISA management fee Percentage on account value Charged quarterly 30bps per annum, minimum £7.5 per quarter 

A "custody" charge is a charge levied for the service of having custody of a client's assets. For example, Hargreaves Lansdown has a custody charge of 45bps per annum, capped at £45 per year for shares held in a S&S ISA, while iWeb and Jarvis XO have no custody charge. ITI's charges are not low, so I don't think anyone with significant holdings should stay.

desertorchid123

I am not particularly impressed with this choice of broker. They may well provide an excellent service but there is little information on them or customer reviews, I for one had never heard of them and their latest accounts don't show a particularly profitable outfit. I would like to know what criteria where used to choose them.

pafpcg

desertorchid123 said:

I am not particularly impressed with this choice of broker. They may well provide an excellent service but there is little information on them or customer reviews, I for one had never heard of them and their latest accounts don't show a particularly profitable outfit. I would like to know what criteria where used to choose them.

Does it matter?  It's possible they were chosen from a short-list of one:  looking at the 143 pages of this thread would surely make any prospective broker think twice about taking on this bunch of penny-pinching complainers!

In any case, it should cost us little other than the effort of form-filling to transfer our ex-SVS holdings to our own preferred broker.  I've already opened an account elsewhere (JarvisX-O since they will accept joint accounts) and will transfer as soon as it can be arranged; hopefully, the twelve-months-worth of dividends frozen in the cash account can be transferred to my bank account immediately.  Provided that ITI are competent enough to do those basic functions, I'll be relieved to have extricated my assets from the SVS administration with only some inconvenience and the loss of interest on frozen dividends.

According to the Distribution Plan, the agreement between the Administrators (LC) and the new Nominated Brokers (ITI), we will have six months to transfer holdings from ITI at no charge and three months to carry-out any actions at the same cost as SVS would have charged, but that assumes that the draft agreement in the Plan is what was formally agreed and signed.  We'll have to wait for an announcement from LC or ITI on the actual terms that will apply.

Or, if you're happy with the services offered by ITI and their charges, you can stay with them.

PS:  Hats off again to Masonic for correctly identifying ITI as the Nominated Broker back in April!

johnburman

Pafpcg...

a) you are right I am a:
[looking at the 143 pages of this thread would surely make any prospective broker think twice about taking on this bunch of]  penny-pinching complainers.  
But me and about 19000 others have >£250m tied up with SVS.  And I am penny-pinching - or sensible - and I do complain (when things go wrong) 

b) You are right to say Hats off again to Masonic for correctly identifying ITI as the Nominated Broker back in April!
c)  ITI Capital are for ordinary XO clients VERY expensive.  They are not designed for us but for FX traders....which is why they went after the SVS book of FX clients.  It will be interesting to see how they treat us when we are transferred over.  As I said earlier the 5-6 weeks delay after transfer does not bode well.

AND
d)   See this about ITI Capital on the FCA Register website under Regulatory Actions:

11/03/2014

Fines On the 24 February 2014 the Financial Conduct Authority (the "FCA") imposed on Forex Capital Markets Limited and FXCM Securities Limited (together "FXCM Ltd") a financial penalty of £4,000,000 in respect of Breaches of Principle 6 and Principle 11 of the FCA's Principles for Businesses. FXCM Limited settled at an early stage of the Authority's investigation and therefore qualified for a 20% (Stage 2) discount under the Authority's executive settlement procedures. Were it not for the discount, the Authority would have imposed a fine of £5,000,000. Principle 6 breach Between 1 August 2006 and 17 December 2010, FXCM Ltd treated its customers unfairly as it failed to pass on favourable price movements to its customers and instead the FXCM group retained the benefit, reducing the customers' ability to profit from trading in rolling spot forex trades. Principle 11 breach Between July 2010 and August 2011, FXCM Ltd failed to be sufficiently open and co-operative and disclose to the Authority information of which it would reasonably expect notice, namely: 1. the fact that in July 2010 US authorities had begun to investigate FXCM Group company in relation FXCM LLC's (US sister company) order execution policies; and 2. the subsequent decision by the FXCM Group company to settle with the US authorities and pay redress to its US customers who had suffered detriment due to asymmetric pricing. A copy of the Final Notice, which sets out the reason for the action, is displayed on the FCA's web site and can be accessed using the following link: http://www.fca.org.uk/your-fca/documents/final-notices/2014/forex-capital-markets-limited

 

masonic

leonde said:

Unsettling news about ITI Capital's past incarnations. Puts me in two minds about whether it is worth using them to sell stocks from my portfolio I don't want in order to save the extra expense from transfer out fees.

If you initiate a transfer out promptly, there will be no transfer out fees. Selling unwanted holdings would be a good idea though, as stock transfers can take 2-3 months to be completed in normal times. Get your portfolio into a state where it can be left alone for a while before initiating the transfer out of ITI.

englishmas

Hi masonic, two questions
If normally the transfer will going to take 2-3 months , that mean your portfolio is frozen for all that time , it is bit risky considering the way the current market fluctuating. Is there any window to sell  during the transfer?
 I had an advisory account with SVS, is this going to be transfer as XO account ( that is what I want)) or I will end up with another advisory account with ITI.
Thanks

masonic

englishmas said:

Hi masonic, two questions
If normally the transfer will going to take 2-3 months , that mean your portfolio is frozen for all that time , it is bit risky considering the way the current market fluctuating. Is there any window to sell  during the transfer?
 I had an advisory account with SVS, is this going to be transfer as XO account ( that is what I want)) or I will end up with another advisory account with ITI.
Thanks

I wouldn't consider it risky, no. If you are adopting a sensible investment strategy then you should be making long-term investments, so having to leave your portfolio alone for a few months should not be any great hardship. Unlike this current insolvency, where people were, without warning, denied access to their portfolios for a lot longer than 2-3 months, people will be able to make any changes to their investments prior to initiating a transfer out of ITI, so if they hold things they wouldn't feel comfortable hanging onto over that sort of timeframe, they could trim those holdings. Making changes on the ITI side during a transfer out would be a big no-no and could cause considerable further delay to the process if the wrong holdings end up being transferred as a result (or you end up in default of LSE for selling things your original nominee doesn't have at settlement). Holdings can generally be freely traded when they turn up on the other side (should they not all arrive at the same time).

For those with less sound investment strategies that involve day trading / market timing, then there is the option to liquidate and transfer in cash, which should reduce the transfer time considerably, but would leave you out of the market for that time.

I don't know what the plan is for advisory clients, although I'd guess you wouldn't automatically be enrolled in an advisory service at ITI.