The Financial Services Compensation Scheme (FSCS) earlier today said it expected to pay compensation costs of £28 million ($42.5 million) in 2015/16 related to the insolvency of Alpari UK. The broker, as most of LeapRate’s readers know, got into trouble on January 15, 2015, when the spike in the Swiss franc led to losses on many of its customer accounts and eventually forced it to file for insolvency and to appoint special administrators.
About a week ago, the FSCS finally confirmed that all of the products and services Alpari UK once offered to its clients were protected by the scheme and therefore clients of the ill-fated broker could apply for compensations regardless of the services used. The first payments are due in May 2015.
Meanwhile, the portal for filing compensation claims, specifically designed by KPMG, Alpari UK’s administrators remains sealed for thousands of the former broker clients. Many of those who got access experience difficulties with the financial terminology they encounter. For instance, ETX Capital, the new owner of Alpari UK’s client list is looking into the reasons for so many traders clicking on the “Waive your claim” button.
The estimate of the compensations was provided in an update by FSCS on levies for 2015/16. The bill stands at £319 million, which is £32 million higher than the amount forecast in FSCS’s Plan and Budget in January.
In the face of the hefty sum of compensations over the Alpari UK case, investment intermediation firms are set see a decrease in their levy bill. The FSCS said this is “because of a reduction in the costs relating to other investment defaults, and an expected increase in recovery forecasts for the coming year (including for Alpari).”
To view the official announcement by FSCS, click here.