Alpari UK clients to be compensated by UK's compensation scheme

5 March AtoZForex, Lagos — UK’s Financial Services Compensation Scheme has been working closely with Alpari UK’s Joint Special Administrators (KPMG) over the settlement procedure of client funds. The FSCS has carried out an independent investigation into the nature of Alpari UK’s business and therefore deems it fit that some clients will be eligible for compensation according to the rules of the scheme.

Since the Joint Special Administrators of Alpari (UK) Limited opened up a channel for claims to be submitted, as reported by us last week, most of the clients of the defunct broker are being contacted to agree their balance(s) and submit their claims. The process involves the JSA inviting clients via email to the claims portal for them to enter necessary details and state their claims. Only clients with cash only balances on their accounts prior to 9:00 GMT 15 January 2015 are being invited and who didn’t enter any trade positions after that.

The JSA will compensate all eligible clients. For those who wish to be compensated by the FSCS instead, they have to make their intention known on the JSA claims portal. The FSCS will then settle such clients’ claims if eligible and in accordance with the basis of account balances agreed on the JSA claims portal.

Multibank Review
Visit Site
96/100 Review
Visit Site
96/100 Review
Visit Site

Acceptance of a FSCS compensation will therefore result in the transference of the individual’s entire claim from the JSA to the FCSC, including dividends payable (if applicable to the client). The client may be entitled to dividend compensation from the FSCS if your claim is in excess of FSCS’s compensation limit of £50,000.

After an intention for compensation from the FSCS is made to the Joint administrators, this will be brought to the notice of the FSCS and such individuals will be contacted.

A challenge for the JSA will be centered on how to deal settling clients who have very minimal balances, so small that the cost of processing and transfer cannot be justified. Over 100,000 clients are expected to the eligible for compensation from the JSA as Alpari UK clients to be compensated by UK's compensation scheme.

KPMG's Alpari UK financial figures are reported to be as the following:

  • Losses suffered in the year ending December 31st, 2013-$9.7 million (£6.3 million)
  • Annual turnover totaling $86 million (£55.7 million)
  • Current liabilities, equals $34.5 million (£22.3 million) (excluding the amount owed to professional clients)
  • Amount owed to professional clients $18.9 million (£12.2 million)
  • Total sum owed to Citi (prime broker) about $8.8 million
  • Total sum owed to FXCM (prime broker) $2.6 million.
  • Amount repatriated to the special administration estate as client funds $99.6 million
  • Amount outstanding for repatriation as client funds $1.3million

Think we missed something? Let us know down in the comments section.

Leave a Reply

Your email address will not be published.