Reyker Securities admins schedule second phase of first distribution
Mark Ford, Adam Stephens and Henry Shinners of Smith & Williamson LLP (“S&W”), the special administrators of Reyker Securities Plc, have provided an update to clients of the firm.
The JSAs are continuing to take steps to try to obtain instructions from all clients who have not yet provided instructions in respect of their Client Money.
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 approximately 1,180 Client plans where additional information is still required from Clients to either:
- Verify personal bank accounts designated by Clients to receive Client Money (where it was not possible to verify them via the electronic GBG check on the Portal); or
- Complete the distribution to their own choice of broker which may require additional information or forms to be completed by the Client before the designated broker will take receipt of funds; or
- Update previously submitted instructions to ‘hold Client Money until the Distribution Plan has been approved’ in order to confirm that their first-interim distribution can now be distributed to their Nominated Broker (or otherwise).
Clients who submitted a CMIF prior to the August 2020 deadline and are yet to receive their first-interim distribution should contact client services to confirm what additional information or action has been requested of you and is still required from you before the distribution may be paid.
If any Client has not yet submitted a Claim to Client Money or CMIF, this can still be done at any time through the Portal. Before submitting a CMIF, Clients should familiarise themselves with the terms and conditions of the distribution of the CMP.
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.
As before, 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 will address this and ensure the additional 5% is distributed accordingly.
The JSAs have 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.
The JSAs expect the second phase of payments for the first interim distribution to commence shortly following 18 June 2021 and, subject to receipt of complete and accurate information before the deadline, the majority of catch-up distributions should be completed before the end of July 2021.
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 first formal notice of the JSAs intention to close the CMP to claims was provided in the recent letter sent to all Clients that are yet to submit a claim to Client Assets and/or a CMIF. Where a response is not received within 28 days from the Client, additional steps will be taken to contact them in accordance with the Client tracing program.
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 of 2021.