Reyker Securities admins report transfer of custody assets is complete
The joint special administrators (JSA) of Reyker Securities have provided an update to clients of the firm.
The JSAs say that the transfer of Custody Assets, Corporate Action Income (CAI) is practically complete.
To date, more than 98% of transferrable Custody Assets have been Transferred and are now held with the respective Nominated Broker or instructions have been issued and the Transfer is in process.
The JSAs add that they are working with the Nominated Brokers to finalise the transfer of the very few remaining stock lines, each of which will require a bespoke solution in order to overcome specific challenges.
All CAI received up to 6 August 2021 (previously 30 June 2021) and due to Transfer to a Nominated Broker has now been processed with the exception of CAI due to Clients whose intermediary Investment Manager was Ingenious. The JSAs await further instructions from Ingenious before such transfers can be processed.
Clients who submitted a claim to Client Money and a Client Money Instruction Form (“CMIF”) prior to 7 August 2020 were able to participate in the first phase of the first-interim distribution.
The JSAs have completed the first phase of the first interim distribution with the exception of a small number of client plans where additional information is still required from clients.
If any client has not yet submitted a claim to Client Money or a CMIF confirming their distribution instructions, this can still be done at any time through the Portal.
The JSAs issued a letter in May 2021 providing notice of a “catch-up” first interim distribution for all Clients who did not submit their CMIF in advance of the 7 August 2020 deadline or are still yet to do so. The catch-up first interim distribution will mean participating Clients receive 85% of their Client Money or, alternatively, 80% if the respective Client is not a FSCS Protected Claimant (or is yet to be confirmed as such).
Where Clients originally received only 80% of the first interim distribution and have subsequently been confirmed as being a FSCS Protected Claimant, the catch-up distribution has addressed this and the additional 5% has been distributed accordingly.
The JSAs requested Clients submit their CMIF before 17.00 hours on 18 June 2021 in order to ensure they receive their catch-up distribution at the earliest opportunity.
To date, the JSAs have processed the following in respect of instructions received by 17:00 hours on 18 June 2021:
- All instructions to pay to a personal bank account (where account details could be verified);
- All instructions to pay to a Nominated Broker (with the exception of Ingenious Clients as bank account details have not yet been provided);
- All instructions to donate to NHS Charities Together; and
- Payments to alternative brokers are progressing, subject to complete and accurate broker information being provided and where the broker is engaging.
The JSAs will continue to process the first interim Client Money distribution where instructions have been received since the 18 June 2021 deadline on a periodic basis.
If any Client has not yet received their first interim Client Money distribution (and instructions have been provided) they should contact Client Services on 0800 048 9512 or clientservices@reyker.com.
Following the first and second phase of the first interim Client Money distribution, there will remain an outstanding balance of 15% of Client Money for the majority of participating Clients who are FSCS Protected Claimants and 20%, less their share of the CMP distribution costs, for those who are not FSCS Protected Claimants.
Following legal advice, the JSAs have concluded that a final distribution should not be paid until such time that the CMP has been closed to claims in order to protect Clients, the Company and the JSAs.
The effect of the CMP being closed is that any Client Money held for a Client who has not submitted a Client Money claim by the time of closure, will cease to be held as Client Money for that Client and will instead be set off against the costs of distributing the CMP. Any Client affected by the closure will, as a result, only have an unsecured claim against the Company. At present, it is anticipated there will be no return for unsecured creditors.
As no further claims are able to be admitted against the CMP once it is closed, the JSAs can then progress to distribute the final balance of Client Money due to all participating Clients and finalise the costs of it being paid out of the CMP.
The JSAs can only close the CMP where they are able to satisfy the FCA and the Court that they have taken reasonable and proportionate steps to contact Clients who have not yet claimed, informed them of the proposed closure and the effect it will have and to return their respective Client Money.
Accordingly, the JSAs have devised and begun implementing a detailed Client tracing program and disclosed the proposed course of action to the FCA. The level of tracing efforts will be tiered and proportionate to the value of the Client’s portfolio of Custody Assets and/or Client Money.
The Client tracing programme has, so far, reduced the number of Clients that have not submitted a claim to Client Money from 1,439 to 1,025.
In due course the JSAs will file an application in Court and with the FCA (for any Client Money Rules modification they require) in order to close the CMP in late 2021. Subject to Court availability and the relevant permissions being granted, Clients that have submitted their claim and distribution instructions may therefore receive the balance of their Client Money in November or December 2021.
Reyker Securities plc is a fund custodian that holds and safeguards cash and assets on behalf of its clients. The firm was placed in Special Administration by the High Court following an application by its directors on 8 October 2019.