Alpari UK clients meeting results: $6M for IP, most assigning claim to FSCS

The long-awaited meeting of clients and creditors with Alpari UK special administrator KPMG was held yesterday in London, giving both sides the opportunity to explain and update on the process, and to air concerns. The meeting was also attended by representatives of the UK’s Financial Services Compensation Scheme (FSCS).

While KPMG is still working to value the trades of clients who traded CHF pairs (or had open positions involving CHF pairs) on January 15, all other clients who had cash-only balances or had open trades in other currency pairs not involving the Swiss Franc should be receiving their money back soon, within the next several weeks.

A few interesting notes from the meeting:

  • The sale of Alpari UK’s trademarks, domain names and licences (back) to Alpari Group’s owners was done for $6 million.
  • Of the roughly 110,000 Alpari UK clients out there, nearly half (45,524 accounts) had a zero balance.
  • Of the remaining 55,000 accounts, less than 10% (or 4,553 people) have logged in to the Claims Portal. Of those, only 2,812 people representing about $13.4 million have agreed their balances so far.
  • The majority of those clients who have agreed their balances have chosen to assign their claim to the FSCS. Specifically, 2,203 clients have chosen to go the FSCS route, versus just 609 who will stay with KPMG.

Clients’ choice to assign claims to the FSCS vs. staying with the Administrator

A key point of confusion among Alpari UK clients is the choice they have to assign their claim to the FSCS, which insures all client accounts up to a maximum of £50,000, versus ‘staying’ with KPMG and waiting to receive a refund from the Special Administrator. In actuality, it should not make much of a difference to clients, even those who had more than £50,000 in their accounts. Those clients will initially get £50,000 from the FSCS, and later (likely) most if not all of the rest as monies are later transferred from the Special Administrator to the FSCS.

In fact, even those clients (with less than £50,000 in their accounts) who stay with KPMG may need to make a partial claim at a later stage with the FSCS. KPMG’s fees – which we believe today total more than £3 million – will come out of client funds. That means that KPMG will haircut about 5% of all client funds for their own fees. But clients who don’t get all their money back can always later petition the FSCS for the remainder, up to £50,000.

To download the 44 page slideshow presented to clients and creditors by KPMG click here.

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