Swiss franc turmoil claims FX trader Alpari UK

West Ham sponsor enters insolvency after Swiss currency crisis
“Alpari UK, which signed a three-year deal with the football club in 2013, among a string of companies feeling the impact of the sharp move in the currency markets on Thursday”
http://www.theguardian.com/business/2015/jan/16/west-ham-sponsor-alpari-swiss-currency-crisis

West Ham sponsor Alpari hammered by Swiss U-turn on franc cap
http://www.standard.co.uk/business/business-news/west-ham-sponsor-alpari-hammered-by-swiss-uturn-on-franc-cap-9981953.html

Swiss franc turmoil claims FX trader Alpari UK
http://www.ft.com/fastft/262972/swiss-franc-turbulence-claims-fx-trader-alpari-uk

End to euro cap on Swiss franc ensnares brokers
http://www.ft.com/cms/s/0/a1d0ca62-9d37-11e4-adf3-00144feabdc0.html#slide0

Alpari UK currency broker folds over Swiss franc turmoil
http://www.bbc.co.uk/news/business-30846543

Swiss franc shock forces West Ham shirt sponsor Alpari out of business
“Foreign exchange broker Alpari has become one of the largest casualties of Thursday’s panicked trading of the Swiss franc”
http://www.telegraph.co.uk/finance/currency/11349958/Swiss-franc-shock-forces-West-Ham-shirt-sponsor-Alpari-out-of-business.html

FX broker Alpari UK enters into insolvency after Swiss franc shock
http://uk.reuters.com/article/2015/01/16/uk-markets-forex-alpari-idUKKBN0KP10720150116

Final Whistle For West Ham Shirt Sponsor
http://news.sky.com/story/1409116/final-whistle-for-west-ham-shirt-sponsor

 

 

Publication Date: January 16, 2015
“On January 15, 2015 the Swiss National Bank unexpectedly removed the upper boundary of CHF against EUR. These measures triggered a sharp rise in CHF and resulted in exceptional volatility on the Forex market in CHF currency pairs. As a result many forex brokers faced financial problems. In particular, on January 16, 2015 Alpari UK announced that it entered into insolvency.

As a result of volatility movements the company cannot any longer meet the capital adequacy requirements of the FCA (UK). In the nearest future external control will be introduced and a program of financial recovery will start.

Please note that Alpari UK is a separate legal entity operating under the Alpari brand and its financial situation does not affect other Alpari companies.

In particular, Alpari Limited (Saint Vincent), Alpari Limited (Belize) and Alpari International Limited (Mauritius), Alpari Ltd. (Bermuda) have recently changed their margin requirements for EURCHF to protect their clients. Due to these measures these companies do not face any financial difficulties and provide their services in full.

Best Regards,
Alpari”

Source: alpari-forex.com, “Alpari UK Insolvency Does Not Affect Other Alpari Companies ”
http://alpari-forex.com/en/company/news/2015/01/16/alpari_uk/

 

Why Did Some FX Brokers Become Insolvent and Some Not?
“An unexpected announcement by the National Bank of Switzerland (SNB) to de-peg the Swiss Franc from the Euro caused the Franc to climb approximately 40% in a matter of minutes. Many currency brokers who seemed like solid companies became insolvent or were at risk of regulatory issues due to lack of capital requirements. These companies included FXCM, OANDA and Alpari. I will explain how the proper risk management of a forex brokerage could have prevented this.

When the SNB made the announcement, many investors that were short on the Swiss Franc received margin calls. Under normal market conditions, the brokerage can exit the trades with their liquidity providers at will. In this case, the market moved so rapidly that the brokers were not able to exit the trade when their clients had margin calls. This led to crippling loses for these currency brokers.

Most STP (straight-through processing) brokerages segregate client funds in one way or another and have an equal amount of money aggregated in the banks providing their liquidity. This event proved that having client funds 1:1 at the clearing banks is insufficient.

Light_on_door_at_the_end_of_tunnel

The brokerages that weathered this crisis and came out as industry leaders are the ones that had more than the total sum of their trader equity allocated to the liquidity providers. This is not the regulatory capital requirements which can’t be used by the broker for operations, but rather a percentage of broker’s profits that remains by the liquidity provider. Some brokerages have 2:1 ratios while others have as much as 3:1. In this scenario, the broker will sustain losses in such a drastic moving market, but not enough to seriously affect the operations of the brokerage.”
ref: http://forexmagnates.com/why-did-some-fx-brokers-become-insolvent-and-some-didnt/

 

Exclusive: Alpari UK’s Sale Imminent after Suffering $45 Million in Negative Client Balances

“Forex Magnates has learned that Alpari UK is in hectic acquisition negotiations with a number of potential buyers and the sale of the broker will be announced in the next few days.

It has also been revealed to us that the amount of negative client balances Alpari UK is on the hook for is about $45 million, while the firm’s client equity is estimated to be around $100 million. The breakdown of the negative exposure is $20-$25 million in liabilities and about $15-$25 million in regulatory capital shortfall.

The identity of the potential buyers has not been revealed yet but there are a number of brokers who announced they are using this opportunity to take over fallen competitors.

The news of the imminent sale comes after the UK branch of this large Russian broker reversed its insolvency process announcement in a surprise move last night.

Virtually all brokers have been releasing updates over the weekend about their reaction to the game-changing floor drop by the Swiss National Bank (SNB). While some faced losses, others made it clear that they are on the hunt for new business, either by targeting clients directly as a marketing strategy or by expressing interest in acquiring assets from failing market participants.”
ref: http://forexmagnates.com/exclusive-alpari-uks-sale-imminent-suffering-45-mln-negative-client-balances/

“…For the avoidance of any doubt and notwithstanding previous announcements by the company, Alpari (UK) Limited has not entered a formal insolvency process. ..”
http://www.alpari.com/company-news/posts/2015/january/important-announcement/

Breaking: FXCM Emerges as Potential Buyer for the Business of Alpari UK
In a surprise, brazen move, FXCM – just out of its own trouble, has emerged as a potential savior for Alpari UK. It now seems the American firm asked for the $300 million Leucadia National bailout so it can expand.
ref: http://forexmagnates.com/fxcm-emerges-potential-buyer-business-alpari-uk/

The Forex Industry Battles EUR/CHF Meltdown: Real Time Updates
“Forex Magnates provides a breakdown of the EUR/CHF crash’s impact on the FX industry. See how much each broker lost, who is looking to take over failing competitors and who is looking to get bought out of the market.”
http://forexmagnates.com/forex-industry-battles-eurchf-meltdown-real-time-updates/

Alpari UK Placed in Special Administration by FCA as No Deal Has Been Reached
“Article updated with official announcement. KPMG will try to find a buyer for the broker themselves in a last effort to save the business or KPMG will have to oversee the distribution of the company’s funds.”
ref: http://forexmagnates.com/alpari-uk-declared-insolvent-deal-reached/

Swiss Bank Dukascopy Will Reimburse Traders with Negative Balances
“… The note states: “Management of Dukascopy Group has decided to take an exceptional decision to cover negative balances on client accounts related to CHF move on SNB decision on 15.01.2015.

In spite of the fact that agreements and regulation allow Dukascopy to claim negative balances compensated by clients, it was decided to release customers from obligation to cover negative balance…”
“…Oanda reported that it had waived negative balances. Another forex provider, Easy-Forex, offers a guaranteed stop loss which prohibits the account to go into negative.”
ref: http://forexmagnates.com/swiss-bank-dukascopy-will-reimburse-traders-negative-balances/

 

Special Administrators appointed to Alpari (UK) Ltd
“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:
alpariukclaims@kpmg.co.uk

The administrators will endeavour to respond to your query as soon as possible.”
http://www.alpari.com/company-news/posts/2015/january/important-announcement/

 

What are my employee rights in company administration?
http://www.companyrescue.co.uk/company-administration/employee-rights-in-administration

 

Employee Rights During Administration
“Redundancy during administration
During the first two weeks of the process, the administrator has the right to make anyone at the company redundant in order to cut costs.

Employees made redundant within the initial 14 day period are classed as ‘ordinary creditors’.

Although you may still be entitled to lost salary and even redundancy pay, this puts you to the back of the money-owed queue if the company can’t pay up.

However, if you are made redundant after 2 weeks have passed you become a ‘preferential creditor’ and stand a better chance of recovering any unpaid salary, employee benefits and redundancy pay.

Preferential and secured creditors get paid in full out of the company’s assets, before the remaining funds are split between ‘ordinary’ creditors. Read our guide: How to make a claim with a company in administration for further details.”
http://www.money.co.uk/article/1009558-employee-rights-during-administration.htm

“The administrators have a period of 14 days after their appointment to decide if they want to offload the costs of any employees by dismissing them. If they do so within the 14-day period, those former employees become “ordinary creditors” within the administration, so will line up along suppliers and other creditors.”
http://www.theguardian.com/money/blog/2013/jan/18/employee-rights-administrators

Oanda and ETX Capital enter race for Alpari UK, Fri Jan 23, 2015 4:34pm GMT
http://uk.reuters.com/article/2015/01/23/us-swiss-snb-brokers-idUKKBN0KW16I20150123

 

 

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