Alpari UK talks fail, company enters administration

LeapRate has learned that, after a frantic weekend search for an acquiror or outside investor, Alpari UK has formally entered administration, to be led by KPMG. Approximately $99 million of client funds will be returned to Alpari UK clients.

We would remind our readers that the insolvency of Alpari UK does not affect other Alpari Group companies, including the flagship Alpari RU operation. To help combat the negative association, Alpari RU initiated an aggressive new campaign today, setting a zero minimum deposit requirement on all trading accounts.

Many rumors were flying around this weekend regarding Alpari UK, most of them unfounded (like that FXCM was going to buy Alpari UK). What we understood happened was mainly centered around another large well-capitalized FCA regulated broker taking over Alpari UK and folding it into their operations. However, in the words of one executive involved in the discussions, ‘it was going to be impossible to get a deal done in time. Alpari UK was basically unbuyable.’

Following the effects of Thursday’s extremely high volatility in the EURCHF currency pairs as a result of the Swiss National Bank having abolished the 1.20 floor on the franc against the euro, Alpari’s UK division became insolvent within a matter of hours after this industry-changing event.

The company searched for a potential purchaser, however today administrators have been called in, according to a report by FXStreet this afternoon, with further confirmation of the matter in a publication by the Financial Times.

The administrators are Richard Heis, Samantha Bewick and Mark Firmin of professional services and auditing conglomerate KPMG LLP.

The report by FXStreet included comment from Mr. Heis, who is a Partner at KPMG and joint special administrator: “Following the announcement by the SNB last week, Alpari (UK) Ltd sustained substantial losses as a result of negative client balances, and was faced with no other choice but to enter into special administration. We have had a number of enquiries from interested parties in relation to the company’s business. We will be speaking with these parties and others over the next few days, and hope to secure a deal to preserve the business and jobs as far as possible.”

He continued: “The company holds some USD98.5 million of retail client money which has been segregated and we shall be returning this to clients or making other suitable arrangements in accordance with statute and the regulatory framework at the earliest opportunity.”

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