SVS Securities - shut down?

pafpcg

Danie5 wrote: »

And if the shares are too difficult to return, sell the lot and transfer the cash to everybody's bank account?

No thanks!

The cost of repurchase (stamp duty & commission) combined with the inevitable loss in the bid-to-offer spread would be, I suggest, far greater than the transfer cost from broker to broker, even an expensive one. Then there's the implications of capital gains tax on the sale of assets held in the SVS accounts...

It's obvious that LC intends to fulfill its administration of SVS by transferring client assets to another broker even though it's taking months to organise. The slow pace may be frustrating but at least our assets appear to be safe.

johnburman

Pafpcg is right. I have shares and some (limited) cash and divis as cash. I do not authorise anyone to sell my shares. I simply want de facto possession of my shares. I have them de jure, but I want access to them. Let me decide whether to sell them, not some brker - that is why I am an XO client. So get em transferred over and then letme decide. Question is, why LC the delay in transferring my shares to me?

masonic

johnburman said:

Question is, why LC the delay in transferring my shares to me?

The nominated broker has not yet agreed to receive your holdings. They are currently undertaking a due diligence exercise, after which they will sign an agreement to receive the holdings and take on the investors as clients. LC will also need to get formal approval for the transfer from both the court and creditors committee. This approval is required by law.

manorhouse

I could not get into this discussion yesterday has the site changed format ? I take it no one else has been contacted by  Yue Xiu Asset Managers.

olderbutnowiser

manorhouse said:

I could not get into this discussion yesterday has the site changed format ? I take it no one else has been contacted by  Yue Xiu Asset Managers.

I've had numerous cold-callers since this debacle started whereas I had non prior to August last year. Odd that! No idea if one of them was from these Chinese guys because I always put down the phone within a few seconds of taking the call.

snipkin

New document on Leonard Curtis SVS web page re new broker for asset transfer (broker not named). First sentence of announcement under heading 'Positive Progress:on Transfer':
"The Joint Special Administrators (the "Administrators") are pleased to inform clients that they have entered into a short period of exclusivity with a single regulated broker to progress the transfer of custody assets and client money to that broker."

Danie5

Why can I not arrange transfer with a broker of my choice and why must it be a broker chosen by LC? If I don't like the LC choice I will move to my chosen broker in any case. I suspect there must be benefits for LC and that there will be penalties if you transfer your assets. Does anybody know what happened in the case of Beaufort Securities?

masonic

Danie5 said:

Why can I not arrange transfer with a broker of my choice and why must it be a broker chosen by LC? If I don't like the LC choice I will move to my chosen broker in any case. I suspect there must be benefits for LC and that there will be penalties if you transfer your assets. Does anybody know what happened in the case of Beaufort Securities?

There will be no benefit to LC. In fact it would be better for them if everyone picked their own broker as they could keep clocking up billable hours for many months while they slowly progressed through the individual transfers one by one. It is the FSCS and other creditors of SVS that will benefit, and the administrator has a duty by law to act in their best interests.

As for Beaufort, as per the latest progress report (here):

Client Portfolios returns

Following the approval of the Distribution Plan by the Committee and by the Court on 26 July 2018, we have transferred over 95% of Client Portfolios relating to BACSL’s 17,600 Clients, mainly to other brokers: 

• 15,820 were transferred to TSC, who were able to take on the majority of the Clients based in the UK and certain other territories with assets held on UK exchanges or assets or cash denominated in GBP; 
• 350 were transferred to AFH, which acquired the former Colwyn Bay Client base; 
• 296 Clients have been transferred to their own selected brokers; 
• 22 Clients have been paid their Client Money directly to their accounts whilst other arrangements are agreed in respect of any Client Securities. This excludes any hardship payments made by the FSCS to the Clients directly; 
• 71 clients have voluntarily liquidated part or all of their Client Portfolio and been paid the proceeds; and 
• 21 clients have requested to abandon part or all of their Client Portfolio.

The first bulk transfer was the transfer to TSC. A couple of months later, the bulk transfer to AFH was processed. AFH agreed to waive any onward transfer fee for a period of 3 months, so it was more efficient to transfer to AFH rather than wait for PWC to start processing client's own selected broker transfers. Perhaps there will be an onward fee transfer waiver in this case too, or if you are willing to wait, you'll have the option of transferring to your own nominated broker.

johnburman

The point ot make masonic is that LC did not become administrators last month but in August of last year.
Of ocurse they had to form a creditrs committee and set  a(now extended "bar date".  But they should have had brokers carrying out due diligence 3 months ago, under a conditional contract with they being set for completion ASAP the commiittee an dCourt gives the OK.  this is now all being delayed untill "April/May".

The only piece of good news I supppose is  there may be an 'onward fee transfer waiver' here.  Transferring to your own broker is going to be an admin nightmare.  Far better for one transfer...but whay the delay?    

masonic

johnburman said:

The point ot make masonic is that LC did not become administrators last month but in August of last year.
Of ocurse they had to form a creditrs committee and set  a(now extended "bar date".  But they should have had brokers carrying out due diligence 3 months ago, under a conditional contract with they being set for completion ASAP the commiittee an dCourt gives the OK.  this is now all being delayed untill "April/May".

Administrators can't just wade in and assume everything is in order and open up the books to interested brokers.

First, they must gain access to the company's IT infrastructure and take steps to ensure this remains operational, including the retention/acquisition of any support staff needed. They would need to gain an understanding of the business in order to reduce the company's costs, while ensuring critical operations are maintained (particularly important for a Special Administration). They must take steps to safeguard assets, begin the process of reconciling those assets, liaise with regulatory bodies such as the FCA and FSCS, carry out an investigation into the affairs of the company prior to it entering administration, For individuals with high expectations, such as yourself, they need to develop a dedicated webpage and set up a phone line so that they can minimise the time they will spend distracted in 'customer support'. They would also need to identify appropriate regulated firms who might be able to take on the client assets and make initial contact with these.

At the time the administrators released their statutory Report and Proposals in late September, much of this had been done or was well underway. A total of 11 interested brokers had submitted indicative offers based on unverified information. So brokers were carrying out due diligence 3 months ago.

There was even some progress towards an online client portal which would allow investors to check and verify their holdings, prior to letting the first nominated broker have access to the data to complete their due diligence and make a formal offer to acquire the accounts. Naturally a bar date was required to give clients time to finalise their claims prior to the final database being offered up to the nominated broker (presumably through a second portal which protects investors from being identified personally) for the period of exclusivity.

So yes, if you think LC should have just ignored its statutory requirements and spent all of its time inviting prospective brokers over for a cup of tea while they looked over the books, and those brokers could then sign up to a conditional contract the following week, I can understand why the timelines have not met with your expectations.