Reyker Securities plc, a fund custodian that held and safeguarded cash and assets on behalf of its clients, failed in March. The English High Court has now approved a distribution plan that will hopefully transfer funds back to its disappointed investors. The Financial Services Compensation Scheme will pay up to £85,000 per customer for the costs of the special administration.
Until recently Reyker has been attempting to find a buyer for its business, but it has not been possible to achieve a sale. Consequently, the directors of Reyker have decided to place the firm in special administration. The FSCS says that its directors placed it in administration this time last year. The Joint Special Administrators will soon be writing to clients about this and will name the nominated brokers. After this, the adminitrators will send each customer a Client Asset Return Statement in a separate letter. This will list all the assets and recently received money to be returned.
The FSCS adds: "If your losses are because you couldn’t sell assets or settle transactions during the Special Administration, we can’t compensate you. We also can’t compensate you for poor investment performance alone."
The court made its order on Friday 16 October. Since the withdrawal of the putative purchaser’s offer for Reyker’s business and a wholesale transfer of all client money and custody assets under Regulation 10B, the administrators have concluded that a series of partial transfers of custody assets under Regulations 10B and 10C and a separate distribution of client money in accordance with the FCA’s Client Money Distribution and Transfer Rules (as set out in CASS 7A), now represents clients' best interests.