IBP Markets Enters Special Administration Amidst FCA's Concern of Financial Crime

On September 15, 2023, the UK's Financial Conduct Authority (FCA) imposed restrictions on wholesale broker IBP Markets Limited. The move was prompted by the regulator's concerns about the firm's business conduct, as well as to protect clients' funds.

Subsequently, the FCA stopped IBP Markets from carrying out regulated activities and prevented it from devaluing assets, client funds, and custodial assets without consent.

The FCA had previously worked with IBP Markets to make voluntary restrictions on regulated activities in May 2023 in order to address concerns about its business operations. However, due to subsequent concerns about the protection of client money, the FCA decided to stop the firm from carrying out regulated activities.

Earlier this year, the FCA took action against IBP Markets, restricting its business activities, Bloomberg reports. These restrictions were based on concerns that the company was unable to reconcile client assets and that the integrity of the information it used for reconciliation was in question. In addition, the FCA expressed concern that the company might be involved in financial crime.

In light of these restrictions and in order to protect the interests of clients, the directors of IBP Markets applied for special administration of the company. On October 13, 2023, the court appointed David Philip Soden and James Robert Bennett from Teneo Financial Advisory Limited as joint special administrators. 

According to documents prepared for the court hearing, IBP Markets held significant client assets, of which approximately £36 million ($44 million) was client money and £653 million was client assets in custody. Clients, including wealth managers and professional firms, will receive proposals regarding the special administration procedure within eight weeks of the administrator's appointment. This will include information on how to make claims.

Special administration is an insolvency procedure designed for investment companies in which special administrators are appointed by a court to control and manage the operations of an insolvent company. The purpose is to expedite the process of returning funds to clients, to provide safe custody of assets, and to involve the relevant authorities in rescuing or winding up the company.

(Source: Finance Magnates)