About 11,500 clients of failed wealth management firm Reyker Securities are a step closer to accessing their trapped funds after the High Court approved an asset distribution plan.
The Financial Services Compensation Scheme (FSCS) said on Wednesday the plan for the transfer of assets was approved by the court on Friday 16 October.
Reyker Securities is a fund custodian that holds and safeguards cash and assets on behalf of its clients. The firm was placed in special administration by the High Court following an application by its directors on 8 October 2019.
Mark Ford, Adam Stephens and Henry Shinners of Smith & Williamson were subsequently appointed as joint special administrators (JSA) of Reyker.
The FSCS said in an update it hopes the JSAs will be able to set out more detailed timescales for the transfer of assets in the coming weeks.
The terms of the distribution plan allow for clients to be transferred to one or more nominated brokers and the JSAs will soon write to clients confirming who the five nominated brokers will be.
They will then separately send customers a client asset return statement detailing all the assets and recently received money to be returned by a series of transfers to the new brokers.
Most customers will be automatically transferred to one of the five brokers without any deduction from their money and assets. The FSCS will pay up to £85,000 per individual customer for the costs of the special administration.
Customers with portfolio values of more than £85,000 are required to flag their specific request to claim compensation in the JSAs’ portal, the FSCS said. If clients don’t claim compensation in this way, they will have to pay their share of the costs of the special administration before assets can be transferred to a new broker.
FSCS chief operating officer Jimmy Barber said: “We want to thank Reyker clients for their patience. We hope it will be possible for the JSAs to set out more detailed timescales for the transfer of assets in the coming weeks.
“There have been several instances of third parties issuing fraudulent communications targeting Reyker’s clients affected by the special administration. We would ask Reyker clients to remain vigilant and exercise caution when dealing with correspondence regarding the special administration.”