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SVS Securities bites the dust

Discuss Brokers, trading, fees, experiences
Alaric
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Re: SVS Securities bites the dust

#241920

Postby Alaric » August 5th, 2019, 5:46 pm

Bouleversee wrote: So we need to find out whether our brokers/platforms do transfer our shares to custodians and who the latter are.


I would expect the position to be declared on the Company website.

Interactive Investor for example.

https://www.ii.co.uk/about-ii/your-protection

In the UK the group operates an execution-only broker service under the interactive investor brand name, looking after over £21bn of assets on behalf of 300,000 customers. This service is provided by Interactive Investor Services Limited, which is authorised and regulated by the FCA. Your legal agreement is with this company and your investments are registered in the name of Interactive Investor Nominee Services Limited.

Interactive Investor Services Limited does not operate as a bank, does not have any exposure to under-performing assets (including sub-prime) and does not lend any of the stock it holds for customers.


Hargreaves
https://www.hl.co.uk/security-centre/ho ... investment

Stocks protected in nominee accounts with you as beneficial owner

Stock you hold with us is held in the name of or to the order of Hargreaves Lansdown Nominees Limited, or by an approved third party custodian. Hargreaves Lansdown Nominees Limited is a non-trading company so it cannot run up liabilities of its own and Hargreaves Lansdown accepts full liability for any default by our nominee company. We maintain detailed records of all your investments and assets for which you will at all times remain the beneficial owner. We do not lend stock held in our HL or PMS service.


Our senior management and CASS Committee are responsible for periodic reviews of the nominees with which stock is deposited.

monabri
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Re: SVS Securities bites the dust

#241926

Postby monabri » August 5th, 2019, 6:33 pm

Dod101 wrote:Special Administrators seem to be appointed for a specific task only and it does not suggest that they are going bust. maybe an accountant can help.
Dod



https://www.leonardcurtis.co.uk/wp-cont ... min....pdf

Q. What is a Special Administration?

A. The Investment Bank Special Administration Regulations 2011 (“Special AdministrationRegulations”) were introduced in an attempt to improve the process where an investment bank fails. An investment bank for these purposes is a Firm which holds Client Assets (Client Monies and Custody
Assets) and holds certain permissions from the Financial Conduct Authority (“FCA”).

--- Client Monies is the cash held for Clients within their portfolio with the Company.
--- Custody Assets are the individual stocks and shares and other investments that form the rest of a Client’s portfolio with the Company.

etc.


Note especially:
The costs and expenses of dealing with and distributing client assets (which include client
monies) are paid out of client assets. Other costs and expenses are paid out of the firm’s
assets. If clients suffer a shortfall as a consequence of these costs and expenses it is likely they
will have a claim against the Financial Services Compensation Scheme (“FSCS”) in this respect.

The Joint Special Administrators will liaise with the FSCS in this regard and will provide more
detailed updates to clients in due course.

Pendrainllwyn
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Re: SVS Securities bites the dust

#241928

Postby Pendrainllwyn » August 5th, 2019, 6:39 pm

A broker that self-clears will settle trades directly with the Exchange's clearing house. They will normally then custody those positions in their own accounts (firm and client accounts) at the clearing house. A broker that doesn't self-clear will employ a third party to do so. This third party will normally custody the assets too. The custodians I am aware of are highly capitalised banks. Brokers are required to do due diligence on custodians before hiring them and I would expect that in the vast majority of cases custodians are more heavily capitalised than the brokers they provide services to. It is not uncommon for a broker to self-clear in their home market but use a third party when offering international stocks to their clients.

A broker, regardless of whether they self-clear or not, is required to maintain separate accounts; one for their own house positions and another for client positions. On a daily basis the broker is required to ensure that what should be in the client account is there. Mistakes may happen which cause client assets to be over or under segregated (1). If so, depending on the size of the mistake, the mistake should be reported to the FCA or recorded on a breach register (which is available for inspection by the FCA). Regardless of the size of the mistake it should be corrected as soon as it is identified. The FCA takes client money rules seriously, audits broker practices, and brokers are subject to disciplinary action for not following client money rules. It is important to note that even if a broker uses a third party there is a risk that the client account is under-segregated because the third party moves assets into and out of the client account on the instructions of the broker.

The whole point of client money rules is to ensure your assets are segregated. An honest broker with good procedures should have your assets segregated regardless of their financial position. Of course there is a risk that a broker doesn't through deliberate malpractice or an error which they are unable to rectify.

(1) Over (under)-segregated. The client account has more (less) cash or securities than it should.

Pendrainllwyn

monabri
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Re: SVS Securities bites the dust

#241977

Postby monabri » August 5th, 2019, 10:25 pm

In cases like this - what would the probability be that say 10%, 20%, 50% of the pooled shares are NOT there?

(I'm trying to work out how far the FCSC would cover my account if when they open Pandora's box, the box is only partially filled).

I assume £5k per client as a worse case for admin charges (which would net Leonard Curtis administrators £67m based on 13500 clients - I'm sure that this is probably an upper admin figure!).

mike
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Re: SVS Securities bites the dust

#241996

Postby mike » August 5th, 2019, 11:25 pm

This has a nasty smell about it

What concerns led the FCA to take action on this firm?

Acting on intelligence received about the assets in which SVS invested its clients’ money, we conducted urgent supervisory work and identified serious concerns about the way in which the business was operating.

https://www.fca.org.uk/news/news-stories/svs-securities-plc-enters-administration

monabri
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Re: SVS Securities bites the dust

#242299

Postby monabri » August 7th, 2019, 8:44 am

Assuming that the pooled accounts are correct (barring deliberate fraud they should be!) transferring client assets from SVS to another platform mitigates the hassle for the administrator of selling shares and redistribution of the proceeds. More attractive is to "introduce" 13500 new clients to someone like The Share Centre (TSC) like they did with Beaufort Securities clients. Assuming an introduction fee of perhaps £100 per client then this would amount to a £1.35m fee. TSC charges will recoup the £100 in a year or so and their customer base increases and operating costs per head are reduced. I'd see that as a "win-win-win" for investors, Leonard Curtis administrators and the platform they transfer to.

monabri
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Re: SVS Securities bites the dust

#243020

Postby monabri » August 9th, 2019, 12:40 pm

There was a report issued this morning citing the reasons why the FCA acted.

https://www.fca.org.uk/publication/supe ... c-2019.pdf

It looks like SVS have been offering bespoke 'model portfolios' for people to invest their pensions in. These model portfolios contain a high percentage of illiquid bonds and are high risk. When questioned, SVS reported that these bonds were only packaged in the model portfolios so the risk was confined to such portfolios. That seems to not be the case. Of course, the incentive for SVS was high fees. Some of the companies behind these bonds have already gone belly up.

They also encouraged IFAs to sell these model portfolios.

There was also the minor matter of custody assets (shares). In April SVS reported custody assets of £249m. In May, this dropped to £178m , a fall of £71m. It also seems that assets of 10 clients to the combined total of £85m were not reported.

SVS have also defaulted on paying on a £5m bond they issued and - when questioned - do not have a means to pay the bond.

The general message is that the FCA didn't feel that SVS was being managed properly, lacking the resources (financial and non-financial).

From "moneymarketing"

https://www.moneymarketing.co.uk/collap ... -fca-says/

Alaric
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Re: SVS Securities bites the dust

#243056

Postby Alaric » August 9th, 2019, 2:47 pm

monabri wrote:The general message is that the FCA didn't feel that SVS was being managed properly, lacking the resources (financial and non-financial).


The FCA does seem to have come up with multiple issues. With the possible exception of the custody reporting, these don't seem to impact the plain vanilla aspects of running an on-line dealing site.

But it's also pension transfers again. As a guess the use of high yield but unsecured bonds enabled pension transfer hurdle tests to be achieved, thus enabling less scrupulous advisers to sign off pension transfers from defined benefit schemes.

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Re: SVS Securities bites the dust

#246575

Postby jwillis3 » August 23rd, 2019, 3:28 pm

Has anyone affected had any contact regarding their accounts yet? I have heard nothing so far - I would have thought that a courtesy email to all the affected clients would have been posted by now.

Willis

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Re: SVS Securities bites the dust

#246577

Postby mc2fool » August 23rd, 2019, 3:40 pm

jwillis3 wrote:Has anyone affected had any contact regarding their accounts yet? I have heard nothing so far - I would have thought that a courtesy email to all the affected clients would have been posted by now.

Have you looked at the Administrators' site, https://www.leonardcurtis.co.uk/SVS/? According to that they sent a letter to all clients on the 9th of August. (I'm not a client myself).

They also warn about fraudulent letters being sent out in their name....

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Re: SVS Securities bites the dust

#246682

Postby smokey01 » August 24th, 2019, 8:17 am

jwillis3 wrote:Has anyone affected had any contact regarding their accounts yet? I have heard nothing so far - I would have thought that a courtesy email to all the affected clients would have been posted by now.

Willis


Yes I received a letter a week or so back. It was a posted version of the 9th August letter as shown on their website.

monabri
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Re: SVS Securities bites the dust

#246735

Postby monabri » August 24th, 2019, 11:50 am

I've received the letter dated 09.08.2019 - one for each of mine and the wife's accounts.

https://www.leonardcurtis.co.uk/wp-cont ... es-PLC.pdf

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Re: SVS Securities bites the dust

#246978

Postby jwillis3 » August 25th, 2019, 11:54 pm

Thank you for your replies - rather concerned that I have not had any communication.....

monabri
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Re: SVS Securities bites the dust

#253909

Postby monabri » September 25th, 2019, 6:35 pm

Leonard Curtis proposals issued today.

I note that the audits have shown no material discrepancies in terms of custody assets (ie. Shares) and monies.

It would appear that shares are likely to be transferred to another platform....eleven possible candidates. We will be updated at the client/creditor meeting on October 10th.

It's looking like we won't get hands on our custody assets until Q1 2020.

Dividends are being collected up in a special account.

https://www.leonardcurtis.co.uk/SVS/

monabri
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Re: SVS Securities bites the dust

#254223

Postby monabri » September 26th, 2019, 10:59 pm

I had two accounts with SVS.

I received a statement today for my non-ISA trading account. What the SVS database says I own,share wise , and what I have in my records matches perfectly (in this account). :)

The cash level was actually slightly ( slightly ) better than in my records...possible dividends received?

Leonard Curtis explained that they had 21,000 accounts to email details out on so they were sending the statements out batch wise.

supremetwo
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Re: SVS Securities bites the dust

#254231

Postby supremetwo » September 27th, 2019, 12:59 am

Today I received an email from Thailand Trader Mentoring Program April 2020.

You are literally just one step away from being trained by several of the best traders in the Financial Markets of the last 25 years.

The ITPM Thailand Trader Mentoring program will take place on April 16th-April 25th 2020 with the following ITPM Mentors.


This was to an email address specific to SVS and addressed me by the exact SVS name.

It is obvious that their customer list has been sold or leaked by perhaps a disgruntled employee.

This is surely a serious data breach.

Anyone else received similar?

Dod101
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Re: SVS Securities bites the dust

#254283

Postby Dod101 » September 27th, 2019, 10:21 am

This is an example of why it is important to have more than one platform provider for any sizeable portfolio. You may not in the end lose money but you have the hassle and delay in getting access to dividends. I think these days this is the biggest drawback to the whole ISA/SIPP/Trading Account arrangements. I currently use ATS/II for most of my assets and HSBC Investdirect. I need to get the amount with ATS/II down quite a lot and meanwhile hope that the migration from the ATS platform goes smoothly without any glitches.

Dod

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Re: SVS Securities bites the dust

#254288

Postby torata » September 27th, 2019, 10:28 am

supremetwo wrote:This was to an email address specific to SVS and addressed me by the exact SVS name.
It is obvious that their customer list has been sold or leaked by perhaps a disgruntled employee.
This is surely a serious data breach.
Anyone else received similar?


Yes. And similar to you, it's an email address specific to SVS.

Actually I got 2 spam email to my SVS address in 2016 as well - one for an addiction clinic; one just crap. SVS never replied to my query as to how my details could have got out.

torata

supremetwo
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Re: SVS Securities bites the dust

#254315

Postby supremetwo » September 27th, 2019, 11:49 am

torata wrote:
supremetwo wrote:This was to an email address specific to SVS and addressed me by the exact SVS name.
It is obvious that their customer list has been sold or leaked by perhaps a disgruntled employee.
This is surely a serious data breach.
Anyone else received similar?


Yes. And similar to you, it's an email address specific to SVS.

Actually I got 2 spam email to my SVS address in 2016 as well - one for an addiction clinic; one just crap. SVS never replied to my query as to how my details could have got out.

torata

Never had spam to specific names prior to this business cessation.

Prompt reply from the administrators following my complaint email:-

We will contact this party directly to desist in any contact with you.
We do not know how information was obtained whether illegally or not.


Problem is, once it is 'out there' all will be receiving more spam and at worst, scam attempts.

monabri
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Re: SVS Securities bites the dust

#254750

Postby monabri » September 29th, 2019, 1:07 pm

Update

My wife has now received her emails from the administrators . The records tally with ours in both assets held and cash balance. So that's 4 out of 4.

It is looking likely that this will take until Q1 2020 before we regain control of our shares on another platform.

Monabri


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