Financial Services Compensation Scheme  

FSCS to give most Beaufort clients their cash back

FSCS to give most Beaufort clients their cash back

The Financial Services Compensation Scheme has said it will payout to clients of Beaufort Securities in September.

It has said the "vast majority" of the company's clients will get back all their cash and assets, with a distribution plan now agreed.

The FSCS has said nearly all of Beaufort's individual and small business customers will be protected by it so assets and cash can be returned without any loss.

Meanwhile the FSCS has said it will enter into an agreement with the company's administrators, PWC, to meet the shortfall arising from PWC's costs for eligible clients, with costs met directly with PWC.

This will mean the costs will not need to be taken from client assets and client money.

Earlier this year PWC agreed to carry out the administration in two years, rather than the four years as it had originally planned for, which has pushed down the costs of the process from £100m to £55m.

Creditors of Beaufort Securities had reportedly complained PWC's initial proposed fee of £100m was unfairly high.

Beaufort Asset Clearing Services Limited was placed in administration by UK regulators in March 2018 shortly after the US Department of Justice brought criminal charges against the company for its alleged involvement in securities fraud and money laundering.

Beaufort Asset Clearing Services Limited provided the clearing and custody services to Beaufort Securities Limited.

There were approximately 17,000 retail clients and approximately 500 corporate clients in Beaufort Asset Clearing Services Limited.

Beaufort Securities was declared in default by the FSCS in April.