SVS Securities - shut down?

My2penneth

snipkin said:

ahouse185 said:

It might have been easier for ITI if they had taken onboard the SVS system, rebranded it and transferred their own clients to that system rather than trying to transfer SVS clients to the ITI system. The SVS system was reasonably good.

Yes!! This is sort of what I suggested recently. Yours is a better idea than what I suggested - that LC allowed SVS to continue under strict supervision so we could make an 'orderly' exit over, say, a six month period whilst still able to trade as before on the SVS system. The SVS online system - as far as I experienced it over many years - worked, it was intuitive and fast. And you could even fund an account with debit card or withdraw cash in minutes directly into your bank account without faffing around with pdf downloads etc.

Another related point that has played on my mind - please bear with me, I know it is all 'water under the bridge' - troubled waters perhaps... About the selection of ITI Capital as the broker to take over our SVS accounts. I am sure I read somewhere some months ago (perhaps on this forum - not sure) that Leonard Curtis had over 100 brokers interested in taking over the SVS client book. Out of these, LC selected 11 brokers on a shortlist. Out of these 11, three were chosen for final detailed review. One of these three dropped out. So LC were left with two brokers - one of which was ITI (of course the names of the brokers were never disclosed at the time).This was around end of October 2019. There was then a long wait - way past the promised announcement date - before the choice of ITI was finally announced in February 2020. HOWEVER, I am sure I read somewhere that LC rejected the other broker of the two because one of the directors/managers (can't remember) was a previous SVS staff member. Can anyone enlighten me on this?

Perhaps that other broker would have been the better choice?? I understand that LC are now employing ex SVS staff to help ITI sort their mess out!!...5 taken on (3 customer service, 2 technical).



Oh well, another week - will anything be different at the end of this week??..pffft!,

Ex SVS director was what I was told by a LC representative. 

johnburman

I can't see how ITI can comply with the CASS Regulations if at the end of the day it has not allocated the correct dividend to the correct shareholdings of the correct client. But if I am right no transfers out can be made to new brokers. Mind you no transfers have been made.... Mmmmm 

Jamesram

Michael_Reynolds said on 13 Sept 11.03 pm

"...I'm puzzled however given that the official date for ITI to send out the logins was July 24th? I actually received mine by email Sat Jul 25th. If I recall none of us could sight the holdings in our onboarding accounts until we completed the identity verification process by uploading the required proof documents to ITI's website? Once I'd done that I was able to gain full visibility of my onboarding account. My physical unit holldings were Exactly as per my SVS account agreed with Carl Lever at LC. The valuations were also all correct with the exception of two ex PIBS which were overvalued by a factor of 100. PIBS are quoted on the LSE per GBP100. I immediately raised a notification regarding this over valuation with ITI. My cash accounts were also correct apart from the five missing ishare dividends paid June 24th which LC didn't retreive from Crest until August 12th. I think this clearly proves that ITI's claim in their recent message to SVS Clients of Sept 11th regarding fractional transfers of holdings from LC to be a blatant lie. Cash accounts clearly did move on different dates but NOT portfolio unit holdings. I also think that under the terms of the sale agreement that ITI have to facilitate AIM Holdings. Our rights to approve the sale were waived by LC and the High Court. We were given mo choice in the matter of the sale to ITI, something I still find very hard to fathom?. My understanding is that it was ALL or Nothing for ITI.  They had to take the complete SVS database in it's entirety that includes AIM Holdings and Non resident SVS Clients. ITI didn't do any of the required due diliigence prior to signing the sale agreement and are now desperating trying to find excuses for their professional incompetence. I think we must assume that LC would have given ITI ample opportunity to inspect the contents of the SVS Clients database and would therefore have known that many Clients had AIM Holdings and some were non resident. These are all questions that LC must answer. and will have to if this all blows up in thier faces"

This is LC's notification of 6 July,: NOTE these historical messages are all still available on the LC SVS website as PDF downloads so its easy to research

"22 – 23 July 2020

ITI to issue clients with temporary login credentials to complete the onboarding process, following which clients are expected to be able to access their transferred client assets and client money.
The temporary login credentials will be issued via email to clients for whom ITI holds email addresses and via post to clients for whom ITI does not hold email addresses.

The next steps-Once you have received your login credentials from ITI on or around 22/23 July 2020, you will be able to visit their website"

The cynical might observe the term "on or around"- LC already losing confidence in ITI, or just including the posting example? Anyway, there was definitely "slippage" from the start Here is Carl Lever mailing me at 6.40pm on 23 July -" Thank you for your email.  I understand that ITI will shortly be sending an email to all clients informing them that there has been a technical delay and it may be tomorrow before the on-boarding takes place."

You are absolutely right about due diligence issues, but is it not extraordinary that just on an informal basis all these professionals do not appear once to have said to each other "Look lads, a lot of these small SVS  XO punters have invested in AIM listed companies- we assume there is no problem here is there, given that a few years ago some brokers would not hold AIM stocks. I mean nowadays you can even hold them in an ISA, so there won't be any problems at ITI will there?"

I have raised the issue of AIM as a Formal Complaint to David Moss on 12 September - I think I posted a copy on this site then- if I search back now I will lose this Comment!

As to LC's position, I feel that it has already blown up in their faces. The question is how, at what level, how speedily, and with what remedy (if any) they can be brought to book officially. I was interested in the suggestion a few days ago that a complaint could be made to LC's governing body. I might look into that.

RasputinB

I do wonder why ITI confirmed on their website that -

Assets and cash held with ITI Capital continue to be protected under CASS rules.
As a firm, ITI remains well capitalised.

RasputinB

Jamesram said:

As to LC's position, I feel that it has already blown up in their faces. The question is how, at what level, how speedily, and with what remedy (if any) they can be brought to book officially. I was interested in the suggestion a few days ago that a complaint could be made to LC's governing body. I might look into that.

Try these links 1. “Quality of Service” at http://www.leonardcurtis.co.uk/legals/ 2. The Insolvency Practitioner Complaints Gateway at https://www.gov.uk/complain-about-insolvency-practitioner

shiznit76

has anyone traded on Phoenix yet? If my holdings there aren't included with the valuation that has been sent to Iweb i think i will bite the bullet and sell up and hope i can get my cash out to my bank

manted

shiznit76 said:

has anyone traded on Phoenix yet? If my holdings there aren't included with the valuation that has been sent to Iweb i think i will bite the bullet and sell up and hope i can get my cash out to my bank

yeah, I did a trade with my ISA cash. None of my holdings are on phoenix, just the cash that i had not withdrawn. It might be worth doing if you are not worried about your ISA protection, which in my view is overrated. What's the point of having an ISA when we cant access it. I anyways havent been skilled / lucky enough to generate profits over the Income tax threshold (12k) I think, in the years i have held an ISA.

shiznit76

update form email i sent to LC:

I’m sorry to hear that your experience of dealing with ITI Capital to date has not been a happy one.  However, I’m pleased to note that your onward transfer request is now progressing – following initial delays.  We understand that ITI have been inundated with a large volume of broker to broker requests (as you would expect from an audience of clients who have not had access to their portfolios for over 12 months), but are now in dialogue with all the brokers they are dealing with in order to execute these transfers.

 

I can confirm that if you have instructed iWeb that you wish to carry out a transfer of your whole portfolio with ITI Capital to them, it shouldn’t matter that some of your holdings have now started so appear in your Phoenix account with ITI rather than the “Qort” account your assets all initially appeared on when you first completed your onboarding with them.

Jamesram

To answer Michael_ Reynolds point about rights to have consent to share transfers, I think the Regulations automatically remove such rights, presumably so that the Administrator does not have to obtain approval from al 18,000  SVS clients in this case.

The Investment Bank Special Administration Regulations 2011 (“the Regulations”) refered to in the judgment of Miles J are amended by the  The Investment Bank (Amendment of Definition) and Special Administration (Amendment) Regulations 2017 (which were bloody hard to track down online so here is the relevant bit:-

 After regulation 10A(1) insert—“Objective 1—transfer of client assets
10B.—(1) This regulation applies where—
(a)the administrator, in pursuit of Objective 1 (whether or not also in pursuit of Objective 3) enters into a binding arrangement with another financial institution for the transfer to that institution (“the transferee”) of all or some of the property, rights and liabilities of the investment bank [.....}
(3) The transfer of client assets which the investment bank has undertaken to hold under a client contract and of relevant rights and liabilities is to have effect in spite of any—
(a)....
(b) requirement to give notice to, or obtain the consent (however referred to) of, any person who is party to the client contract; or
(c) entitlement of any person to the return of the assets otherwise than by transfer under the arrangement.

There is a difference with client monies .Transfer of cash still requires client consent under CASS7 unless the FCA grants a Waiver. Which in this case they did.

Of interest, given that all our rights of objection are removed by legislation, is the make up of the Creditors Committee. Miles J refers in his judgment:

Para 35. "There is a creditors’ committee, constituted shortly after the company entered special administration. It consists of four client members and the FSCS. Its meetings have been attended by at least one representative of the FCA. The FSCS, as a statutory compensation scheme, has a significant role. The great majority of clients are entitled to compensation for any losses arising from the insolvency of the firm and this includes the costs of returning their assets up to a limit of £85,000 per client. In practice, the FSCS is bearing the great bulk of the costs of the administration and will pay at least the vast bulk of the costs of the distribution plan if approved. The administrators have, indeed, appointed a cost assessors selected by the FSCS to advise on the costs of the administration. It will be seen that the FSCS has a keen interest in the outcome of the administration and as part of that, the distribution plan."

Who were these 4 " client members"? I did not realise that they represented "us". (I had assumed they  were creditors in the sense of outstanding office rent or whatever.) How were they picked- no one invited me!? What info did they have about ITI?

Miles J said at Para 47 I return then to the question of approval. [....] As to the exercise of my discretion, the plan has been carefully formulated in consultation with the creditors’ committee, the FCA, and the FSCS. Clients have been notified of this hearing and, though a number have attended, none objected. The administrators consider, in the exercise of their professional judgment as office holders, that the plan is an efficient and speedy way of returning assets in accordance with Objective 1. I give appropriate weight to their views. Overall, I am satisfied that this is a proper case for approval of the distribution plan and I give that approval.

Well Mr Justice Miles, none of us Clients, attending or not, knew that it was ITI Capital who were the transferees did they- that had been explicitly kept quiet. Apparently we could have asked LC who they were, so long as we agreed not to contact ITI (or tell anyone else?!!)- unfortunately LC never volunteered this "facility" publicly, so no one could know that.

At para 44 Miles J had said "I do not consider the anonymisation of the Nominated Broker to be a cause for concern. It is regulated by the FCA and its identity, as I have already said, has been disclosed to the FCA and the members of the creditors’ committee."

So a lot fell on the shoulders of our 4 representatives, meeting up  with the FCA rep and perhaps crucially, the FSCS Rep. The Judge also notes how important matters were to the FSCS who are footing the Bill for the Administration.

So there we are. I would live to know more about the Creditors committee, what they knew, or or were promised. I know that within a week of ITI Capital being disclosed I was contacting LC to express my concerns about ITI - solvency, experience, cabability, size in UK, etc etc. What were the clients reps on the Committee told about all this? Did they feel that the option to transfer out "for free" was good enough - I suppose in a way it should have been, although why subject us to the hassle of a further transfer if they knew ITI could be dodgy and/or unsuitable? Which in my view the Phoenix platform always will be- its an international day traders platform- its nothing like HL, Jarvis or iWeb, Best Invest etc, which were the REAL comparables to SVS.

Lastly, I seem to recall seeing a report that these 4 representative clients on the Committee were lawyers and experienced other professionals, but I can't recall where I saw that. Do you think they are still meeting as part of this process. What are they saying now? Can we ask them? Who are they? If they are our representatives, should we not be told how to contact them to represent our views?

All this just does not seem right to me. But I guess the real issue now is achieving a speedy and accurate transfer out for everyone- and yes, I suspect that now this really does mean everyone.

My2penneth

Just rang the 8001 number - this put me through to a call centre. The background noise was unbelievable - I've been to quieter football matches (seriously!). The lady on the other end of the phone confirmed it was a call centre in England (unless there is a part of India called "England"). 
I could hardly hear her and her accent was "strong" . I hung up in the end.
Another great service from ITI Capital.