LeapRate's Daily Forex Industry Newsletter
Join now to receive first access to our EXCLUSIVE reports and updates.
Screenshot of a breaking news alert e-mail from Q2 2017
The Financial Conduct Authority (FCA), the UK watchdog responsible for the supervision of investment companies, earlier today issued its official stance on the situation at Liquid Markets, the broker that stopped operations in the aftermath of Black Thursday.
While the bulk of the information that the regulator provides in this FAQ-like announcement may seem trivial and widely known, one statement draws particular attention:
The initial view in the early stages is that there is a deficit in the client money.
There is no elaboration on how that hole in the funds appeared and how it could emerge given the rules for client funds segregation. One thing is certain: the 400 customers of Liquid Markets UK will have some challenging time ahead putting up with the truth regarding what happened to their money.
The special administrators from Baker Tilly have earlier stated they would conduct an assessment of all transactions and positions (the latter were closed on January 27, 2015). They will need about 8 weeks to contact all affected parties, check data and set the record straight.
In the face of the lack of clarity regarding client money, the administrators have already confirmed that in case customers have negative balances, they will have to compensate for the losses themselves.
You can read the full announcement by the FCA on Liquid Markets’ insolvency procedures here.
For LeapRate’s breaking news on the administrators’ appointment and actions, click here.