Sova Capital Limited enters special administration

On 3 March 2022, the Court appointed David Philip Soden, Ian Colin Wormleighton and Stephen Browne, all of Teneo, as Joint Special Administrators of Sova Capital Limited, following an application by the Directors.

What does Sova Capital Limited do?

Sova Capital Limited is an FCA authorised and regulated wholesale broker. The firm provided trading and execution services to its clients, including providing access to the Russian markets.

Why did the Directors of Sova Capital Limited apply to place the firm into Special Administration?

The firm’s business was significantly impacted by its dependence on transactions linked to Russia and Russian assets.

Having considered the firm’s position, the directors concluded that the firm is insolvent, and applied to Court to appoint Teneo as the firm’s special administrators.

Where can I find more information?

You can contact the joint special administrators for further information using the details below:

What will happen to any client money and assets held by Sova Capital Limited for its clients?

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 client money and custody assets to customers in accordance with applicable law.

Costs associated with distributing client money and custody assets back to clients, including the special administrators’ fees, will be deducted from the client money or custody assets.

The Special Administrators will write to the firm’s clients with their proposals for the Special Administration within 8 weeks of appointment, this will include the process of how to make a claim.

Please see below regarding Financial Services Compensation Scheme (FSCS) coverage for these costs for eligible clients.

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. The FSCS is established mainly to assist private individuals, although smaller businesses are also covered. Larger businesses are generally excluded.

For eligible retail clients, the FSCS may be able to 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.

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 Sova Capital Limited or Teneo please end the call and contact them back using the details above.

Is the FCA overseeing the administration?

Sova Capital Limited is still authorised by the FCA and remains subject to supervisory oversight and the FCA’s rules. This is because it may need to conduct regulated activities during the special administration and it continues to hold client money and custody assets.

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.

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