Alpari UK’s Special Administrator, KPMG, has issued an update to (former) clients and creditors of the company.
Interestingly, KPMG points out that in its initial review of trades at Alpari UK on the fateful day of Thursday January 15 (after the SNB’s surprise move removing the EURCHF 1.20 floor) it has found some ‘inconsistencies’ in how certain trades were processed at Alpari UK.
As a result, KPMG points out that a client’s account balance from any time after the SNB announcement that Thursday morning might not be accurate.
This ‘inconsistencies’ issue is not expected to impact Alpari UK clients who only held cash balances in their account (and entered no subsequent trades) as at 9:30am GMT that Thursday. KPMG expects to be able to agree on such cash-only account balances more quickly than those affected by the inconsistencies issue.
The full KPMG statement follows:
Alpari (UK) Limited (in special administration) (“the Company”)
Update to Clients and Creditors– 23 January 2015
This update is in addition to information previously provided.
As previously stated, on administration, there is a pooling event under the FCA’s Client Asset rules,
which means that retail clients (“Clients”) are entitled to share on a pro-rata basis in the client money
pool. Professional clients and other creditors (“Creditors”) do not have a claim against the client
money pool but will have a claim against the other assets of the company.
The Joint Special Administrators are working closely with the Company staff to confirm all Client and
Creditor positions so that statements can be issued as soon as possible.
The pricing of trades
Following an initial review performed by the Joint Special Administrators, it appears that there have
been certain inconsistencies in the pricing of trades closed out in the period before the Joint Special
Administrators were appointed, owing to the volatility in the market after the SNB announcement at
9:30am GMT, Thursday, 15 January 2015. As a result, any account statements or information provided
by other means received by Clients and Creditors after the SNB announcement may not accurately
represent a Client’s or Creditor’s balance.
The Joint Special Administrators continue to investigate and analyse the impact of this issue as a
matter of priority and will provide a further update on their website as information becomes available.
This issue is not expected to impact clients who only held cash balances in their account at 9:30am
GMT, Thursday, 15 January 2015 and entered no subsequent trades. For this reason we expect to be
able to agree such balances more quickly than those affected by this issue.
We will provide statements as soon as possible to clients: where there are unresolved issues this will
delay the receipt of the relevant statements.
Other creditors who are not professional clients will receive formal correspondence shortly setting
out the process for making a claim.
The update to Alpari UK creditors can also be seen here.