Reyker Securities PLC enters special administration

Please note this supersedes the statement we published on 7 October 2019.

What is the FSCS and will they cover any losses?

The Financial Services Compensation Scheme (FSCS) protects consumers when financial services firms fail. It is the compensation scheme for customers of UK authorised financial services firms. It has eligibility criteria both in respect of the people and businesses who are covered.

For eligible clients, the FSCS will cover custody assets and client money shortfalls up to £85,000 including the costs associated with their distribution back to clients.

The Special Administrators will work with the FSCS to determine the position and will provide further updates.

Why did the Directors of Reyker apply to place the firm into Special Administration?

Reyker’s Directors had been pursuing a sale of the business, however they were unable to complete this sale. Due to the firm’s financial difficulties the Directors resolved that it was cash flow insolvent, and in discussion with us, took steps to place the firm into Special Administration.

Where can I find more information?

Customers can find more information about how they will be affected via:

I have an investment held by Reyker, will I get my money or assets back?

The Special Administrators will carry out an assessment of the client money and custody assets held by the firm to confirm the current position. Following the assessment, the Special Administrators will work to return as much client money and custody assets to customers as possible, as quickly as possible.

The Special Administrators will determine in due course how best to return the client money and custody assets. The Special Administrators will write to you with their proposals for the Special Administration within 8 weeks of appointment, this will include the process of how you make a claim.

Do I have to pay to get my money or assets back?

Costs associated with distributing client money and custody assets back to clients, including the administrators’ fees will be deducted from the client money or custody assets. Please see above regarding FSCS coverage for these costs for eligible clients.

Do I need to use a claims management company?

You should proceed with caution if you are approached by a claims management company (CMC).

For the vast majority of clients, there is no benefit in involving a third party in reclaiming your assets.

If you use a CMC to assist in the return of your assets, the CMC is likely to seek a fee which may reduce what you get back.

If you are considering using a CMC to assist with the return of your assets, we suggest you first discuss this with the Special Administrators using the contact details provided on their website.

Being alert to scams

All customers should remain alert to the possibility of fraud. If you are cold called by someone claiming to be from Reyker or Smith & Williamson please end the call and call them back using the number above.

Is the FCA overseeing the administration?

Reyker is still authorised by the FCA and remains subject to supervisory oversight and the FCA’s rules. The Special Administrators are officers of the Court and need to comply with all insolvency law. The individuals appointed are authorised to act as licensed insolvency practitioners by the Institute of Chartered Accountants in England & Wales (ICAEW). We are liaising closely with the Special Administrators.

I hold shares in the VT Reyker Real Assets fund, how does this affect me?

The authorised corporate director of the fund is Valu-Trac Investment Management Limited (Valu-Trac). Valu-Trac has determined that it is in the best interests of investors for it to manage the fund in the interim while it considers the best way forward. For further information please contact Valu-Trac.

Requirements

On 4 October 2019, following an application by Reyker, we imposed certain regulatory requirements on Reyker. These requirements place restrictions on Reyker effectively stopping all movement of client money or assets. Apart from in a few specific circumstances (such as receipt of dividend payments), the firm was not permitted to either receive any new client money or custody assets or to pay away client money or custody assets. Following the restrictions coming into force, Reyker decided not to conduct any further business or any other regulated activities.

Following their appointment by the Court, the Special Administrators requested the lifting of these regulatory requirements. As they were measures we pursued to protect consumers before Reyker entered Special Administration, and in order to allow the Special Administrators to carry out their duties under the ultimate oversight of the Court, we agreed to lift the requirements. This will allow for the eventual return of client money and custody assets to clients, but it is important to note that Reyker will not be restarting its business.