Swiss National Bank’s "Unexpected Policy" Bankrupts Alpari UK

Alpari still haven't responded to my polite enquiry about how to go about withdrawing my funds.

However the "MyAlpari Login" button on the Alpari UK home page now redirects to a modified message, which reads as follows:

The recent move on the Swiss franc caused by the Swiss National Bank’s unexpected policy reversal of capping the Swiss franc against the euro has resulted in exceptional volatility and extreme lack of liquidity. Retail client funds continue to be segregated in accordance with FCA rules. For the avoidance of any doubt and notwithstanding previous announcements by the company, Alpari (UK) Limited has not entered a formal insolvency process. The board of directors are urgently considering all options including a sale and are liaising closely with the FCA. We hope to make a further announcement shortly.

In a news release today KPMG have announced that:

Richard Heis, Samantha Bewick and Mark Firmin of KPMG LLP were today appointed special administrators to Alpari (UK) Ltd, a leading City foreign exchange broker.

which sounds remarkably like a "formal insolvency process" to me! KPMG continue:

Alpari (UK) Ltd applied for insolvency on Monday 19 January 2015 following the decision on Thursday 15 January 2015 by the Swiss National Bank to remove the informal peg to the euro at around 1.20 Swiss francs. The announcement by the SNB prompted volatility across the foreign exchange markets which saw the company and many of its clients make large losses. After a weekend spent in urgent discussions with various parties with a view to selling the company, these efforts were ultimately unsuccessful.

Commenting on the appointment, Richard Heis, partner at KPMG and joint special administrator, said: "Following the announcement by the SNB last week, Alpari (UK) Ltd sustained substantial losses as a result of negative client balances, and was faced with no other choice but to enter into special administration. We have had a number of enquiries from interested parties in relation to the company's business. We will be speaking with these parties and others over the next few days, and hope to secure a deal to preserve the business and jobs as far as possible."

He continued: "The company holds some $98.5 million of retail client money which has been segregated and we shall be returning this to clients or making other suitable arrangements in accordance with statute and the regulatory framework at the earliest opportunity."

Richard Heis has some experience in these matters, having been one of the special administrators of MF Global UK not so very long ago. Then at long last KPMG reveal the piece of information I've been waiting for:

The special administrators will be setting up a hotline for affected customers. Details of this will be posted on the http://www.kpmg.co.uk website later today.

I still can't see any sign of a hotline number on the KPMG website, but the "important announcement" on the Alpari UK website has been updated once again. It now reads as follows:

Upon the application of the directors of Alpari (UK) Ltd, on Monday 19 January 2015, the High Court appointed Richard Heis, Samantha Bewick and Mark Firmin of KPMG LLP as joint special administrators of Alpari (UK) Ltd, under the Special Administration Regime (SAR). Alpari (UK) Ltd is a company incorporated in the UK.

Alpari (UK) Ltd applied for insolvency on Monday 19 January 2015 following the decision on Thursday 15 January 2015 by the Swiss National Bank to remove the informal peg to the euro at around 1.20 Swiss francs. The announcement by the SNB prompted volatility across the foreign exchange markets which saw the company and many of its clients make large losses. After a weekend spent in urgent discussions with various parties with a view to selling the company, these efforts were ultimately unsuccessful.

We have had a number of enquiries from interested parties in relation to the company's business. We will be speaking with these parties and others over the next few days, and hope to secure a deal to preserve the business and jobs as far as possible.

For all queries, please contact:
[email protected]

The administrators will endeavour to respond to your query as soon as possible.

I'll try that email address whilst I wait for the hotline number to be published. I'll let you know how quickly "as soon as possible" turns out to be.

No reply yet to any of my emails to either Alpari or KPMG. However KPMG have now set up a page on their website dedicated to Alpari UK:

https://www.insolvency-kpmg.co.uk/case+KPMG+AF119D1101.html

If you have amounts due to you from the Company as at the date of appointment, you can register a claim by completing a proof of debt form.

Please send your completed proof of debt form, together with supporting documentation, by email to the case contact or by post to:

Alpari (UK) Limited – in Special Administration
C/o KPMG LLP
8 Salisbury Square
London
EC4Y 8BB

Supporting documentation for your claim includes invoices, statements of account, proofs of delivery, contracts or any other relevant information.

The "Contact Us" section of the sidebar says:

Case contact:
Tel +44 (0) 333 202 1397
Email: [email protected]

I've finally received an automated reply to my email to KPMG. It reads as follows:

Dear Sir/Madam

Thank you for your email. Please be advised that we are currently receiving a very high volume of emails regarding the special administration of Alpari (UK) Limited but we will endeavour to respond to your query as soon as possible.

For further information, we suggest you monitor the http://www.kpmg.com/uk/alpari website (from Tuesday 20th January onwards) which we will continue to update as further information becomes available.

Yours sincerely
The Joint Special Administrators

Mark Granville Firmin, Richard Heis and Samantha Rae Bewick were appointed as joint special administrators of Alpari (UK) Limited Limited on 19 January 2015.

The affairs, business and property of Alpari (UK) Limited are being managed by the joint special administrators who contract as agents of Alpari (UK) Limited without personal liability.

Mark Granville Firmin, Richard Heis and Samantha Rae Bewick are authorised to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales.

Alpari (UK) Limited is authorised and regulated by the Financial Conduct Authority. FCA reference number 448002. Registered in England No. 05284142. Registered Office: 5th floor, 201 Bishopsgate, London, EC2M 3AB.

On clicking the link I note that KPMG's Alpari landing page has changed. It now includes an FAQ document, but the "How to submit a claim" section now says merely:

Further information will be provided shortly

The FAQ addresses my particular problem as follows:

Q. I would like to close my account now and have the funds remitted to me – can you action this?

A. The Company is currently unable to action requests for withdrawals from client accounts. If you held an account that had a cash balance at the date of appointment you will be required to follow the claims process in order to receive a distribution for amounts owed to you. Details of the claims process will be published on the website shortly. Unfortunately we are unable to provide any further details on possible timings or the quantum of any distributions at this time.

I tried ringing KPMG's "hotline" for clarification, but I got no answer.

@Andy:

No particular panic here Andy. However being familiar with the WorldSpreads and MF Global "incidents" it seems that a lot of patience might well be required in this case.

That might be more of a problem for others than it is for me, so I'm documenting the process.

How did you gain your understanding that "Alpari hasn't even 'raided' client funds"? There's been a lot of chatter about clause 6.4 in Alpari UK's T&Cs for example:

Unless the Customer has notified the Company in writing to the contrary, the Company may hold Segregated Funds on the Customer’s behalf in a Segregated Account located outside the United Kingdom or pass money held on the Customer’s behalf to an intermediate broker, settlement agent or OTC counterparty located outside the United Kingdom. The legal and regulatory regime applying to any such person will be different from that of the United Kingdom and in the event of the insolvency or any other equivalent failure of that person, the Customer’s money may be treated differently from the treatment which would apply if the money was held in a Segregated Account in the United Kingdom. The Company will not be liable for the solvency, acts or omissions of any third party referred to in this clause.

Now there's news that Alpari Japan is also in trouble.

I've now received another email from KPMG, which does at least seem to answer my original emailed question. Here is what it says:

Dear Sir

Alpari (UK) Limited (in special administration) (the "Company")

Thank you for your email.

We confirm that Richard Heis, Samantha Bewick and Mark Firmin were appointed as Joint Special Administrators to the Company (the "Joint Special Administrators") on Monday, 19 January 2015.

The Joint Special Administrators are currently receiving extremely high volumes of queries from creditors and clients. The Joint Special Administrators will endeavour to answer your queries as soon as possible, however due to the volume and similarity of queries being received, this will be performed through updates on their website.

http://www.kpmg.com/uk/alpari

The website will continue to be updated as further information becomes available.

The Joint Special Administrators are working closely with the Company staff to confirm all client positions. The Company is unable to action requests for withdrawals at present (including requests made prior to the appointment of the Joint Special Administrators but remaining outstanding) from any client accounts, as these accounts are now subject to the special administration process.

In relation to client monies held by the Company, the Joint Special Administrators are working to reconcile holdings and accounts in order to enable client monies to be released as soon as practicable, which is one of the Joint Special Administrators' formal objectives under the Investment Bank Special Administration Regulations 2011. Clients will receive formal correspondence shortly setting out the process for making a claim in order to receive a distribution for amounts owed. As part of the process of agreeing client money entitlements we shall shortly notify a “last date for proving”, although would seek to make interim payments to holders of agreed claims before this date insofar as this is possible.

To the extent that it is not possible to reclaim money, it may be possible to make a claim under the Financial Services Compensation Scheme (‘FSCS’). FSCS is a compensation fund of last resort for customers of authorised financial services firms who become insolvent (such as the Company). For eligible investment claims where the consumer suffers a loss, FSCS can pay up to £50,000 in compensation per person, per authorised firm. If claims are paid by FSCS, it will then assume those client positions against the Company. The Joint Special Administrators are working with the FSCS to agree a process that will enable clients to establish a claim for loss. FSCS will publish an update on its website detailing the process for settling potential claims in due course.

The Joint Special Administrators' proposals, providing an update on the progress of the Special Administration and the strategy going forward, will be sent to creditors and clients of the Company within the next 8 weeks.

Please monitor the Joint Special Administrators’ website for further updates which will be provided as information becomes available.

Kind regards,

The Joint Special Administrators
For and on behalf of the Company

I clicked their link again, but nothing has changed since this morning.

@Jon:

How about:

http://www.fsa.go.jp/en/news/2015/20150120-1.html

Hat tip to:

http://leaprate.com/2015/01/japanese-regulator-confirms-alpari-japan-enters-administration/

Do you suppose Andy had this in mind, from the FCA?

"News for customers of Alpari (UK) Limited"

4. Is there any client money missing?

The special administrators will assess the client money position of Alpari as part of their work. Once the special administrators have carried out this assessment, whether there is any client money missing will become clearer.

The initial view in the early stages is that the client money is whole.

or this from the Financial Services Compensation Scheme?

"Information regarding Alpari UK LImited"

The Financial Services Compensation Scheme (FSCS) is aware of the situation regarding Alpari UK Limited.

We are currently monitoring developments and will provide an update on our website as soon as we are in a position to do so.

KPMG's "Alpari (UK) Limited – in Special Administration" page now includes a PDF of their Notice of Appointment. The "How to submit a claim" section still says "Further information will be provided shortly" however.

I called the "hotline" again and this time I got through to Kye Evans, who was very helpful and after ascertaining that I was a retail client with no quibbles about CHF trades offered this advice:

1. Email [email protected]. I did that on Monday.
2. Keep monitoring the KPMG Alpari page. I'm doing that.
3. As soon as the claims form reappears on there fill it in and send it off. I will do that.
4. Expect a statement of account in due course. My fingers are crossed!

@Jon:

Thus far I have received two generic emails and no claim number.

The KPMG landing page still shows no claim form, but it now includes a PDF "Initial Letter to Clients" which I have yet to receive in my inbox or post box. It appears to be just a scan, and so is difficult to reproduce quickly here. It can be downloaded from KPMG with a couple of clicks of course! The gist is that:

The Joint Special Administrators will write to all clients who have a claim setting out their proposals for achieving the purpose of the special administration within the next 8 weeks.

P.S. The "initial letter" has now arrived in my inbox, and reads as follows:

Dear Sir/Madam

Alpari (UK) Limited – in special administration ("the Company")
Joint Special Administrators – Richard Heis, Samantha Bewick and Mark Firmin

I was appointed Joint Special Administrator of the Company together with Samantha Bewick and Mark Firmin on 19 January 2015.

In accordance with Rule 51 of The Investment Bank Special Administration (England & Wales) Rules 2011, I refer you to http://www.kpmg.com/uk/alpari where you can view Form 2.12B, notice of special administrators' appointment.

The Company's affairs are being examined by the Joint Special Administrators who will write to all clients who have a claim setting out their proposals for achieving the purpose of the special administration within the next 8 weeks. Any urgent communications should be emailed to [email protected]. Alternatively please monitor the website which will be updated as more information becomes available.

The Company traded under the following trading styles: Alpari FX, AlpariFX, AUK, Quantum FX and QuantumFX (this list is not exhaustive).

If you believe you are not a current client as you consider you are not owed any money, or do not wish to make a claim for monies owed, kindly confirm this by email to [email protected] or in writing to Alpari (UK) Limited (in special administration), 8 Salisbury Square, London, EC4Y 8BB. On receipt of such an email/letter your contact details will be removed from the client list and no further correspondence concerning the Company will be sent to you.

Pursuant to rule 296 of the Rules, where the Special Administrators give, send or deliver any notice or other document to you by electronic means, you may request a hard copy of that notice or document. If you choose to request a hard copy, the Special Administrators must send it to you within 5 business days of receipt of the request.

Yours faithfully for Alpari (UK) Limited

Richard Heis
Joint Special Administrator

@Roy:

You old cynic you! Not quite "nobody" though. Kye wished us all well in our attempt to get our money back swiftly.

Three new documents have appeared so far today on KPMG's Alpari page, but still no "claim form". The most relevant for my circumstances is the "Update to Clients and Creditors – 23 January 2015", which reads as follows:

This update is in addition to information previously provided.

As previously stated, on administration, there is a pooling event under the FCA’s Client Asset rules, which means that retail clients (“Clients”) are entitled to share on a pro-rata basis in the client money pool.

Professional clients and other creditors (“Creditors”) do not have a claim against the client money pool but will have a claim against the other assets of the company.

The Joint Special Administrators are working closely with the Company staff to confirm all Client and Creditor positions so that statements can be issued as soon as possible.

The pricing of trades

Following an initial review performed by the Joint Special Administrators, it appears that there have been certain inconsistencies in the pricing of trades closed out in the period before the Joint Special Administrators were appointed, owing to the volatility in the market after the SNB announcement at 9:30am GMT, Thursday, 15 January 2015. As a result, any account statements or information provided by other means received by Clients and Creditors after the SNB announcement may not accurately represent a Client’s or Creditor’s balance.

The Joint Special Administrators continue to investigate and analyse the impact of this issue as a matter of priority and will provide a further update on their website as information becomes available. This issue is not expected to impact clients who only held cash balances in their account at 9:30am GMT, Thursday, 15 January 2015 and entered no subsequent trades. For this reason we expect to be able to agree such balances more quickly than those affected by this
issue.

Claims process

We will provide statements as soon as possible to clients: where there are unresolved issues this will delay the receipt of the relevant statements. Other creditors who are not professional clients will receive formal correspondence shortly setting out the process for making a claim.

This information does however throw a small spanner in my works. Whilst my accounts were all 100% in cash at 9:30am GMT on Thursday, 15 January 2015, subsequently Ray Robot II traded the DAX index in his Alpari UK spreadbet account. He entered short at 11:50:52 (Alpari time) and banked his habitual occasional profit of 50 pips (less slippage!) without any particular problem 7 seconds later.

Subsequently, at 16:56 GMT on Friday, 16 January 2015, I emailed Alpari UK on Ray's behalf, asking if he could have his money back.

I'll see if I can persuade KPMG to reveal exactly where Ray and I now stand in the grand scheme of things!

I've just received another email from the Joint Special Administrators. It doesn't include any new information above and beyond what's mentioned above, but it does include a copy of my Email to Alpari on January 16th.

Progress of a sort?

Hi Daniel,

The modest amount of money I was owed finally arrived in my bank account from KPMG on July 16th.

Due to assorted currency fluctuations/conversions it wasn't exactly what I had in my GBP denominated Alpari accounts on the fateful day, but I suppose in all the circumstances I shouldn't complain too much?