Reyker Securities Plc (in Special Administration)

Mark Ford, Adam Stephens and Henry Shinners of Smith & Williamson LLP (“S&W”) were appointed Joint Special Administrators (“the JSAs”) of Reyker Securities Plc (in Special Administration) (“Reyker”) on 8 October 2019.

This website provides Clients and Creditors with important information and will be updated when additional information becomes available regarding the Special Administration of Reyker.

Update message for the Company’s Clients and Creditors – 10 September 2020

IMPORTANT – NOTICE FOR CLIENT'S WITH CLIENT MONEY

  • Further attempts of fraudulent activity have been reported to the JSAs. We continue to encourage you to remain vigilant and to exercise caution when dealing with correspondence regarding the Special Administration and the Client Money distribution. If you are in any doubt regarding the authenticity of any correspondence you may receive, please do not hesitate to contact Client Services at clientservices@reyker.com or on 0800 048 9512.
  • The deadline to participate in the first interim distribution of Client Money has now passed
  • The JSAs received valid Client Money distribution instructions in respect of 8,834 Client plans and, as at the date of this update, have processed instructions in respect of 7,059 Client plans (representing 80% by number of plans and approximately 77% by value of Client Money).
  • Of the instructions received, a physical transfer of cash was required in respect of 7,353 Client plans (representing 83% of all valid instructions received).
  • Where Clients have instructed the JSAs to distribute Client Money to a personal bank account:
    • Those distributions were completed in August 2020 unless the bank account details provided were not able to be electronically verified.
    • In these circumstances, we have written to the respective Clients requesting further information.
    • This step is taken to safeguard Clients’ money and to reduce the risk of fraud and is consistent with both Reyker’s pre-administration and industry policies.
  • Where Clients requested for Client Money to be distributed to an alternative broker:
    • We have contacted the respective nominated broker to verify the instructions received, its bank account details and to ensure that it has completed its onboarding process and can securely receive the distribution on behalf of the respective Client.
    • In a number of cases, a distribution has not been paid as the JSAs are either waiting for engagement from the new broker or, alternatively, the broker has requested a transfer form from the Client in advance of accepting receipt of funds.
    • The JSAs have urged brokers to contact their Clients where transfer forms are outstanding in accordance with industry practice.
  • Thank you to those Clients who donated Client Money to the NHS. The respective funds have been donated accordingly.
  • A number of Clients elected for the JSAs to continue to safeguard their Client Money until such time that the Distribution Plan relating to the return of Custody Assets is approved with a view to both their Client Money and Custody Assets being transferred to the same nominated broker in due course. Clients that elected to do this will be provided with further details once the Distribution Plan has been approved and their Client Asset Return Statement (as referenced in the Explanatory Statement and Distribution Plan) made available.
  • The JSAs are continuing to verify and process the remaining Client Money distribution instructions in accordance with industry regulations and best practice. If you have any queries regarding the status of your Client Money distribution, please contact Client Services for further information.

Global update – September 2020

  • September’s global update on the progress of the Special Administration has been added to the website (dated 10 September 2020) and can be found here. We will add further updates on a regular basis.

JSAs’ strategy

  • Following the withdrawal of the proposed purchaser’s offer for Reyker’s business and a wholesale transfer of all Client Money and Custody Assets under Regulation 10B, the JSAs have concluded that a series of partial transfers of Custody Assets under Regulations 10B and 10C and a separate distribution of Client Money in accordance with the FCA’s Client Money Distribution and Transfer Rules (as set out in CASS 7A), now represents Clients' best interests.

Transfer of Custody Assets (i.e. stocks and securities)

  • The transfer of Custody Assets is a court-led process and requires approval by the Court of the Distribution Plan, a detailed legal document with accompanying asset schedules and evidence collated by the JSAs, which details how the Custody Assets will be returned to Client ensuring Clients’ rights are protected.
  • As reported above, the terms of the Distribution Plan were approved by the Creditors’ Committee on 31 July 2020 and the Distribution Plan was submitted to Court on 6 August 2020. The Distribution Plan has been listed to be heard by the Court on 16 October 2020.
  • No action is required by Clients prior to the Court hearing in respect of their Custody Assets, however, Clients are recommended to read the Explanatory Statement and Flowchart (published on this website) to assist their understanding of the transfer process.
  • Subject to the Court’s approval, the return of Custody Assets will be undertaken by way of a series of partial transfers to no more than five regulated brokers under regulations 10B and 10C of the Regulations (as opposed to a wholesale transfer to a single purchaser).
  • The number of transfers to be undertaken has been kept to a maximum of five brokers in the interests of Clients and on account of complexity, cost and, particularly, timescales.
  • The Distribution Plan:
    • Deals with the return of Custody Assets (being electronic and paper-based stocks and securities) and Corporate Action Assets (being dividends, interests, redemptions, etc. received in respect of Custody Assets following 8 October 2019); and
    • Does not apply to Client Money held within the Client Money Pool (which crystallised on 8 October 2019 and is being returned by way of a separate distribution of Client Money).
  • For practical and commercial reasons, the identity of the Nominated Brokers cannot be shared at this time.
  • If the Distribution Plan is approved, Clients will receive confirmation of this by post and be issued with a Client Assets Return Statement (via the Portal), which will detail all Custody Assets to be returned (including Corporate Action Assets received following the JSAs’ appointment) and the identity of the Nominated broker to which each Client’s respective Client Assets will be transferred.

Distribution of Client Money held as at 8 October 2019

  • The return of Client Money from the Client Money Pool (i.e. cash held as at 8 October 2019) does not form part of the Distribution Plan and the JSAs are seeking to return this cash to Clients by way of a Client Money distribution in accordance with the FCA’s Client Money Distribution and Transfer Rules (as set out in CASS 7A). This is achieved by engaging with Clients and requesting confirmation as to where they wish their Client Money to be sent.
  • The JSAs issued a letter to all Clients with a Client Money balance as at 8 October 2019 (dated 10 July 2020) confirming a first interim distribution of Client Money will be paid during August 2020 to all Clients who hold a Client Money balance with the Company and have submitted a Client Money Instruction Form by 17.00 hours (GMT) on 7 August 2020.
  • The deadline to participate in the first interim distribution of Client Money has now passed.
  • The JSAs received valid Client Money distribution instructions in respect of 8,834 Client plans and, as at the date of this update, have processed instructions in respect of 7,059 Client plans (representing 80% by number of plans and approximately 77% by value of Client Money).
  • The JSAs are continuing to verify and process the remaining Client Money distribution instructions in accordance with industry regulations and best practice.
  • If you have any queries regarding the status of your Client Money distribution, please contact Client Services for further information.
  • If you have not yet submitted a Client Money Instruction Form, this can still be done at any time through the Portal. Please note, you will not be able to participate in the first interim distribution of Client Money and your share of Client Money will be safeguarded under the JSAs’ control until such time that either a second interim or a final distribution is declared.
  • Before submitting a Client Money Instruction Form, Clients should familiarise themselves with the terms and conditions of the distribution of the Client Money Pool here.
  • Neither Reyker nor the JSAs can give Clients any advice whatsoever in respect of their investments and / or the distribution of Client Money and nothing within this document, the Portal, or any other associated literature issued by the JSAs should be treated as such. If you are uncertain as to the best option(s) for you and your investments and the financial consequences, please seek independent professional advice.

Fraudulent communications

  • Given several instances of fraudulent communications seeking advance payments from Clients have been reported, we continue to encourage you to remain vigilant and to exercise caution when dealing with correspondence regarding the Special Administration.
  • Fraudsters are typically using fake website domain names or email addresses to impersonate Reyker, such as ‘clientservices@reyker-securities.co.uk’ [please note the differing email suffix] and may be masking their caller IDs to appear connected to Reyker, Smith & Williamson or other intermediary providers.
  • We continue to communicate such approaches to the relevant authorities, including the FCA, and ask Clients to remain vigilant to such fraudulent communications.
  • If you are in any doubt regarding the legitimacy of any communication regarding the special administration, please refer to the information provided on the dedicated webpage or contact client services directly on 0800 048 9512 or, alternatively, by email at clientservices@reyker.com. Further information can also be found at https://www.fca.org.uk/consumers/protect-yourself-scams.
  • If you have lost money as a result of a scam, you should contact Action Fraud on 0300 123 2040 or visit www.actionfraud.police.uk.

Financial Services Compensation Scheme (“FSCS”)

As previously reported, the costs of pursuing Objective 1 of the Special Administration (i.e. the return of Client Assets) are paid from Client Assets and, therefore, Clients not eligible for or choosing not to claim FSCS compensation will receive a shortfall in the Client Assets to which they lay claim following the deduction of their share of these costs.

Clients are reminded that:

  • Clients with Client Assets with a total value of less than £85,000 (as valued at 8 October 2019) are automatically treated by the FSCS as if they have submitted a claim for compensation to the FSCS on account of it exercising its power under COMP 3.2.1A of the FCA Handbook. This decision was made by the FSCS with a view to streamlining the process by which eligible Clients may receive compensation and, where possible, ensuring Client Assets are transferred whole; and
  • Clients with Client Assets with a total value of equal to or greater than £85,000 (as valued at 8 October 2019) will not be treated as having automatically claimed compensation from the FSCS. Such Clients are asked as part of the online claims process to confirm whether they wish to submit a claim for FSCS compensation or not (if not already done so).
  • The JSAs wrote to the Company’s non-individual, corporate Clients who may not be eligible for FSCS compensation in March 2020 requesting that they complete and return an eligibility assessment form in order that the FSCS can make a final determination in this regard. Clients that have been asked to complete the form and not yet done so, should return it:

The FSCS can pay up to £85,000 per eligible Client for claims in respect of Reyker Securities plc (in special administration), including those in respect of their share of the Objective 1 costs. Further information on eligibility criteria may be found at https://www.fscs.org.uk/how-we-work/eligibility-rules/

Where Clients are either deemed to have claimed or, alternatively, select to claim compensation from the FSCS and it is subsequently determined that they are not eligible in accordance with the FSCS’ eligibility criteria, the JSAs will write to all such Clients to confirm the options available with regard to meeting their share of the costs.

Next steps

Client’s with Custody Assets (which includes Corporate Action Assets, e.g. income received following 8 October 2019):

  • Should read the Explanatory Statement published on this website in order to gain an understanding of the transfer process. No further action is required at this time in respect of the return of Custody Assets.
  • If the Distribution Plan is approved, Clients will receive confirmation of this by post and be issued with a Client Assets Return Statement (via the Portal), which will detail all Custody Assets to be returned (including Corporate Action Assets received following the JSAs’ appointment) and the identity of the Nominated broker to which each Client’s respective Client Assets will be transferred.

Client’s with Client Money:

  • If you have submitted your claim to Client Assets and your Client Money Instruction Form before 7 August 2020, you should receive a first interim distribution of Client Money before the end August 2020. Please do not contact Client Services for confirmation of a payment date as they do not have this information. Please continue to check your own account or wait for confirmation from your selected broker.
  • If you have not yet submitted a claim to Client Assets or submitted a Client Money Instruction Form, you still need to do this in order for your Client Money to be distributed in accordance with your instructions. Please log on to the Portal (www.reykerportal.com) to do this at your earliest convenience and to ensure that you may participate in future distributions of Client Money.

Corporate Clients that may not be eligible for FSCS compensation:

Contact

The JSAs have a dedicated telephone and email address for Clients and Creditors. These are:

Please note, given the volume of enquiries being received, it is not possible for us to respond to everybody’s individual enquiries, however, best endeavors are being undertaken to provide all Clients and Creditors with the latest information at this website. Where queries relate directly to the agreement of claims to Client Assets or the submission of Client Money Instruction Forms, we are seeking to respond to Client enquiries received by email within 48 hours.

For all press related queries please contact Mark Gee on 0207 131 4597.

The affairs, business and property of Reyker are being managed by the Joint Special Administrators who act as agents of the Company, without personal liability. Mark Ford, Adam Stephens and Henry Shinners are authorised to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. Reyker remains authorised and regulated by the Financial Conduct Authority. FCA reference number 115308. Registered in England No. 01747595

Glossary

A glossary of key terms used within our Client and Creditor communications and published herein can be found here.

 

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